Is an important Tech Index sending a bullish message to investors? It is making an attempt!

Does that mean a low in this important sector is in play? Humbly it is too soon to say at this time!

This chart looks at the Nasdaq Composite Index over the past 25-years on a monthly basis.

The index has spent the majority of the past 9-years inside of rising channel (1), as it has created a series of higher lows and higher highs. It created bearish reversal patterns in January & February as it was kissing the underside of the top of the channel and its fear index was near multi-year lows. The index then declined by nearly 30% following these bearish patterns.

The waterfall decline that has taken place the past 60-days has the index attempting to create a large monthly bullish reversal pattern as it tests dual support at (2). At the same time, its fear index is attempting to create a large bearish reversal pattern, as it could be double topping at its 2009 highs.

Keep this in mind, despite the index declining nearly 30% from its highs, its 9-year rising channel remains in play, which for the short-term sends a positive message.

If dual support at (2) is broken to the downside, this index would send a negative message to the broader market and strong selling pressure would take place. At this time, that message has not been sent.

How The Recent Decline In Stocks Looks "Eerily" Like Major Bear Markets Of The Past