Since we're not getting much in the way of volatility or news with any of the major indexes today and all of our trading ideas are doing quite well with no major updates right now, I thought it might be an excellent opportunity to take a look at where we think this market is headed in the near-term. Knowing targets and what levels the market is gunning for is extremely important when you're actively looking to scalp profits via short-term options trading or positioning yourself in an idea that's trending with the major indexes. The trading pattern that has been working for weeks now is to buy the dips and sell the rips so why stop now? There's nothing that has convinced us anything different is on the near horizon so let's continue to go with it. Yesterday, the market sold off some only to rebound this morning thus continuing to prove our analysis correct. Now, with a target number pegged in your head, it gives you a pretty good landscape to navigate your way to some very decent returns if you are willing to strategically pick your spots on any weakness. Markets Usually Go Up and Down Much More Than We Anticipate Since the NASDAQ 100 (NDX) has been a runaway train now ever since the beginning of the year and has continued to be the leader of the markets on a week by week basis, that's where our analysis today is going to focus. Although it may be in need of a pullback, I'm convinced that it's only going to be a buying opportunity until it reaches roughly 2782. Since the NDX is currently at 2592 as I type, that's a lot of room to run. I've included a weekly chart here to show you why I believe this is the case. Click to Enlarge You'll see back in 2010 the NDX went through a pretty significant consolidation period during the summer months finding support and building a base around its 200 day moving average. Following that consolidation period, the NDX ran for the rest of 2010 until it reached 2011. This is where things started to become very interesting. Many expert traders and investors looked at 2011 with one eye open wondering what the heck was going on. Well, when you eliminate all of the noise that daily charts tend to produce, you'll see that 2011, when it was all said and done was nothing but a very long and volatile consolidation period once again. My experience has taught me that the longer stocks tend to consolidate and build a base, the stronger the next move is going to be. That is no different for the major indexes and as a matter of fact, it's even more reliable since the major indexes consists of thousands of stocks, not just one. With 2011 providing some solid footing (like a lineman in football digging in his feet), the NDX took off in 2012 and hasn't looked back. What I've included in the chart are some logical profit objectives via fib expansion levels, the 200 day moving average, the 3x3 DMA (displaced moving average), the 25x5 DMA and a few other of my favorite technical indicators, a Detrended Oscillator, MACD and Stochastics. It's important to note that no one indicator is the wholly grail but when you can make sense of all of them together, that's when things start to provide a much clearer picture. With that being said, all of my indicators point to strength on the weekly chart of the NDX. The key fib expansion level we're focusing on here is the most logical profit objective that big money is likely going to gun for which is the 2782 red line you see at the top of the chart. The fact that the NDX blew right through the first logical profit objective at 2492 suggests to me that the underlying strength of this market is much greater than many traders and investors may think. You'll notice the NDX is really starting to get away from the 3x3 which suggests that at some point it may want to pull back to it but I believe that will more than likely present an excellent opportunity to get long for some pretty healthy profits once again. How will we know when NDX is ready to take a breather before heading higher? The longer the weekly bars get, the sooner we can expect a pullback on the NDX to the weekly 3x3 but that isn't always the case. It can happen at any time but let me say thrusting stocks or indexes regardless of who or what they are always come back to the 3x3 at some point. The NDX will likely be no exception. Bottom line? When we consider we're in an election year and the fact that we're seeing some very significant underlying strength in the markets, my best educated guess is that this market is likely going to climb a wall of worry in the near term or extend itself higher on positive economic indicators. Whatever the reason may be doesn't matter, it's knowing what it's going to do, not why. If we hit the 2782 level on the NDX somewhere between now and the summer season, the election jitters may kick in and start scaring the living daylights out of everyone because the market doesn't like uncertainty. The bulls will have had their pockets lined with profits by then and it then may become time for the bears to get their fill by feasting on the uncertainty of the election. However, for now... if you want to play this market to the long side, I suggest you look at options that are two and three months out and use a weekly chart of the NDX to position yourself. If you have the time and the intestinal fortitude to manage your trades based on hourly or daily charts, knock yourself out but that's a much tougher game for traders and investors who have a different full time job. Oh, and by the way, that picture of the guy holding the crystal ball looks nothing like me, he's much younger and much better looking. Juuuuust kidding. I hope you find our analysis informative and helpful. We'd love your feedback and comments. Disagree with us? We'd love to hear why. Have a great afternoon, see you manana.