Nasdaq Ready For Another Rip or 10-15% Dip?
As the rally continues in US markets it is hard to not take notice of the curvature on the larger high time frame trend. It is losing momentum and comming into what should be a pivital area.
While there is no way to know how buyers and sellers will respond the loss of momentum signals that what is driving price is slowing and eventually may run out of fuel.
This is a daily chart that is focusing on the average range size for this chart so that IF we see a rejection here we have an idea of what kind of correction is typical. The reoccuring range size here is 10-15%. Being this is a larger trend that has persisted for over a year we may see a larger correction IF there is even a rejection. IF price brakes to the upside no reason to stop dancing until the music actually stops.
While most ignore these signals the cause is simple. Trends persist often to long past their fair value simply due to a positive feed back loop to continue in the same direction until there is a complelling enough reason to get people stop. This typically only occurs when willingly deployed liquidity runs dry. This is something that occurs over time and what I refer to as the rate of decay or loss of momentum represented by the curve in a time vs price chart.
Current Trading Plan:
Patiently watch for a rejection in the top 1/8 of the current price range and IF it occurs begin trading to the short side. A brake of the hand drawn yellow trend below will be a clear signal the trend is likely going to change.
Trade Well...
Your Friend,
Degen
"He that believeth on him is not condemned: but he that believeth not is condemned already, because he hath not believed in the name of the only begotten son of God" ~ The Lord God
If you don't like it don't read it.... I do
While there is no way to know how buyers and sellers will respond the loss of momentum signals that what is driving price is slowing and eventually may run out of fuel.
This is a daily chart that is focusing on the average range size for this chart so that IF we see a rejection here we have an idea of what kind of correction is typical. The reoccuring range size here is 10-15%. Being this is a larger trend that has persisted for over a year we may see a larger correction IF there is even a rejection. IF price brakes to the upside no reason to stop dancing until the music actually stops.
While most ignore these signals the cause is simple. Trends persist often to long past their fair value simply due to a positive feed back loop to continue in the same direction until there is a complelling enough reason to get people stop. This typically only occurs when willingly deployed liquidity runs dry. This is something that occurs over time and what I refer to as the rate of decay or loss of momentum represented by the curve in a time vs price chart.
Current Trading Plan:
Patiently watch for a rejection in the top 1/8 of the current price range and IF it occurs begin trading to the short side. A brake of the hand drawn yellow trend below will be a clear signal the trend is likely going to change.
Trade Well...
Your Friend,
Degen
"He that believeth on him is not condemned: but he that believeth not is condemned already, because he hath not believed in the name of the only begotten son of God" ~ The Lord God
If you don't like it don't read it.... I do
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