Targets and trading frequency
What is your projected target for this next upleg on the NDX ?
I am not very good at determining exact price and time targets - I just get in and out of position when my indicators tell me to do so. I believe that the main idea behind technical analysis is not to predict the future but to get a more clear picture of the present. So, I buy when the picture says that the market is starting to go up and sell when it says that the market is starting to go down.
Of course, when we know well enough what the present picture is (or, in other words, when we have a reasonably reliable model of the psychological state of the trading masses), we can (using the law of psychological inertia) project that the market will continue to move in the same direction for some reasonable time and project targets with a certain degree of probability. However, they aren't anything certain, so we should not rely on them too much. The market will do whatever the market wants to do and we must use technical analysis to get a clear picture of what it is doing.
Back to your original question, I expect QQQ to reach the low 30s before this bear market rally is over. COMPX should reach around 1550, the NDX - around 1200-1300. They will enounter the 200-dma around these levels. They might even break above it for a little while, but let's take the things one step at a time. When/if we get that far, we'll look at the indicators to tell us whether there is a chance for a little bit more upside left.
If you look at the daily chart of these indexes (let's use the NDX, since this is what you asked about), you'll see a bull flag starting from the August low with an implied target again around 1125 (926.6 + (1052.5 - 856.3) = 1122.8), which gives us another estimate for the potential upside target:
How often do you normally trade your positions?
As I explained above, I normally let the indicators tell me when to trade - so, I don't know in advance. The time frame of the trade can be as short as a single day (if I am wrong and am stopped out of position) or as long as several months. But my goal is to trade once every few weeks to every few months.
Regards,
Vesselin
What is your projected target for this next upleg on the NDX ?
I am not very good at determining exact price and time targets - I just get in and out of position when my indicators tell me to do so. I believe that the main idea behind technical analysis is not to predict the future but to get a more clear picture of the present. So, I buy when the picture says that the market is starting to go up and sell when it says that the market is starting to go down.
Of course, when we know well enough what the present picture is (or, in other words, when we have a reasonably reliable model of the psychological state of the trading masses), we can (using the law of psychological inertia) project that the market will continue to move in the same direction for some reasonable time and project targets with a certain degree of probability. However, they aren't anything certain, so we should not rely on them too much. The market will do whatever the market wants to do and we must use technical analysis to get a clear picture of what it is doing.
Back to your original question, I expect QQQ to reach the low 30s before this bear market rally is over. COMPX should reach around 1550, the NDX - around 1200-1300. They will enounter the 200-dma around these levels. They might even break above it for a little while, but let's take the things one step at a time. When/if we get that far, we'll look at the indicators to tell us whether there is a chance for a little bit more upside left.
If you look at the daily chart of these indexes (let's use the NDX, since this is what you asked about), you'll see a bull flag starting from the August low with an implied target again around 1125 (926.6 + (1052.5 - 856.3) = 1122.8), which gives us another estimate for the potential upside target:
How often do you normally trade your positions?
As I explained above, I normally let the indicators tell me when to trade - so, I don't know in advance. The time frame of the trade can be as short as a single day (if I am wrong and am stopped out of position) or as long as several months. But my goal is to trade once every few weeks to every few months.
Regards,
Vesselin
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