MDA - Market Direction Analysis

[LG]

wahz: First installment...

The following chart of the NAZDAQ Comp illustrates major pivot
points with dark green for highs and red for lows extended
left to see how they were influenced if influenced by the
horizontal price action support and resistance areas of the
bull market. It would have been better to use a daily chart
but to show all the data I would have needed to use a chart
spread across three 19-inch monitors to capture all the data
in one window. This would have made comparing the right to the
left side of the chart very difficult.

The light green lines and the magenta lines represent the
significant pivot highs and lows extended left since the now
infamous SI D-Blow thread was created. (I did add a few
thinner dark green and red lines extended “right” for future
reference. In the manner, I’ve always illustrated them on my
charts.)

One might notice two primary pivot points, the 1997 high and
the 1997 came into play as any good technician would have
expected as the price action neaed these price levels.

Several technicians on SI predicted a major retrace of the
NAZDAQ bull market blow off was coming. Some of us did it in
advance. Some called the turn to the date and others shortly
before and shortly after. Some of us predicted the severity of
the decline. Since I began sharing my charts on SI in 1999, I
have been pointing out and illustrating on my charts that
previous horizontal price action support and resistance areas
often display influence over future price action. It has been
no surprise to me to see the price oscillations and
significant pivot points of this NASDAQ bear market find
support or resistance influence from the left side of the
chart.

However, chest-beating rhetoric proclaiming absolutely this or
that will occur during this retrace is just an exercise of
self-aggrandizement to attract a crowd. Many of the methods
being heralded as having absolute predictive capabilities is
just bogus technical analysis.

First take a look at the retrace charts, to see the hits and
misses...(The light blue vertical lines illustrate the
comparison from May to the "retrace theory".The light blue
retrace target is the one expressed on the "retrace theory" thread on SI)

By the way it is no "theory" that the NAZDAQ is retracing. Many
on the now defunked SI MDA/MDD thread repeatedly warned it was
coming as we shared many technical analysis techniques and called
attention to many of the tools out there including the Bradley
Siderograph.





Then take a look at the following NASDAQ Comp monthly chart,
which has the 175, 200, 225 and 250-monthly simple moving,
averages plotted for reference. Ask yourself, how can anyone
deduce from moving averages that have NEVER come into play in
the history of the Index, that when the price action pierces
one of them, it absolutely means the price action is going
lower? While the price action may indeed go lower. The pierce of
one of the moving averages plotted on the chart below, did not
predict it. Drawing those types of conclusions is just bogus technical analysis.





More to come...

Regards,
LG