Hi Vesselin,
Well we finally did get the break of prior lows on the NASDAQ and today have bounced back up through it. I had been building up my short positions since the end of August and have considered the prior market action leading up to today somewhat uneventful. But we appear to be at some cross roads and I'm leaning toward the bearish side and fully expect the S&P500 and Dow to break July lows. Nevertheless I will let the market lead the way.
I'm sitting on some nice profits and am contemplating my next move. Technically, there has been a substantial break down and the NASDAQ has penetrated the neck line of the H&S (or triangle) on higher volume. Incidentally, I had gotten into a debate recently with some technicians on the validity of a H&S as a continuation pattern. It certainly is a statiscally relevant pattern as far as I'm concerned but apparently not everyone feels that way. No matter, whether it is a H&S or triangle is really academic at this point because the break of the lower line on higher volume has the same implications.
At this point it would appear that we may see the typical retest of the neckline. However, increased volume today is a concern and a red flag. The Dow and S&P500 did not have the increased volume though. Also, many of the trend indicators are showing a very substantial bounce may occur. So, it is not out of the realm of possibilities that we may be seeing a set up for a huge double bottom here. I believe keeping an eye on the volume and the neckline is key.
The S&P500 and NASDAQ bullish percentage indicators are in or near the oversold area.
The 21ma on the put/call is starting to turn
The McClellan oscillators have turned. They usually precede the summation indices and the trend change.
Vix has turned down from within the oversold area.
Care to share your thoughts?
Regards,
Rob
Well we finally did get the break of prior lows on the NASDAQ and today have bounced back up through it. I had been building up my short positions since the end of August and have considered the prior market action leading up to today somewhat uneventful. But we appear to be at some cross roads and I'm leaning toward the bearish side and fully expect the S&P500 and Dow to break July lows. Nevertheless I will let the market lead the way.
I'm sitting on some nice profits and am contemplating my next move. Technically, there has been a substantial break down and the NASDAQ has penetrated the neck line of the H&S (or triangle) on higher volume. Incidentally, I had gotten into a debate recently with some technicians on the validity of a H&S as a continuation pattern. It certainly is a statiscally relevant pattern as far as I'm concerned but apparently not everyone feels that way. No matter, whether it is a H&S or triangle is really academic at this point because the break of the lower line on higher volume has the same implications.
At this point it would appear that we may see the typical retest of the neckline. However, increased volume today is a concern and a red flag. The Dow and S&P500 did not have the increased volume though. Also, many of the trend indicators are showing a very substantial bounce may occur. So, it is not out of the realm of possibilities that we may be seeing a set up for a huge double bottom here. I believe keeping an eye on the volume and the neckline is key.
The S&P500 and NASDAQ bullish percentage indicators are in or near the oversold area.
The 21ma on the put/call is starting to turn
The McClellan oscillators have turned. They usually precede the summation indices and the trend change.
Vix has turned down from within the oversold area.
Care to share your thoughts?
Regards,
Rob
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