Friday's trading was crucial in determining if we are heading higher as it would breach the downward trend. Despite the RSI being on the low already, and DMI telling a possible trend change NASDAQ100 dips as hard as it did way back in 2012. The total correction is almost the same size as June2013, but a similar move as to friday's will extend it so far to tell us that the sentiment has drastically changed as many trends are breached.
------Status quo:
- Went below the trend channel low
- Whole range bar *Stopped exactly at the trend range
- Did not manage to overcome 20DMA
- Under 50 and 100 DMA
- Could not leave lower bolinder part
=
If downtrend continues, will leak lower faster as all ranges are breached. Next level to test 3440 - breaching it would be much more serious.
Some stories flow around regarding dow theory that if industrial and transportation companies are doing well and are attractive to investors, both the Dow Jones Industrial Average and the Dow Jones Transportation Average should be making new highs in unison, serving to confirm a healthy economy. Still we are in the age of internet now so this may not be applicable to the fullest degree anymore.
High flyers are now 20-30% discounted from top position and that is a lot of money taken away. Going lower for them (especially iconic companies like Facebook, Tesla, Google) would signal something more serious as these usually lead markets higher (as they did whole 2013). One possible outcome would be further bullish trend to grow and that friday's action was the bears strongest and possible last breath. But given he blow on Friday, i would lean to lower lows next week, so i suggest to stay on the sidelines if possible until proven a different direction. As i say, it is better to enter in a confirmed bull trend then in hopes of it - hope never works in stock markets.
PS - i am in no way a good elliot wave user, but it does look like the 5th wave. Some see it as a third wave
------Status quo:
- Went below the trend channel low
- Whole range bar *Stopped exactly at the trend range
- Did not manage to overcome 20DMA
- Under 50 and 100 DMA
- Could not leave lower bolinder part
=
If downtrend continues, will leak lower faster as all ranges are breached. Next level to test 3440 - breaching it would be much more serious.
Some stories flow around regarding dow theory that if industrial and transportation companies are doing well and are attractive to investors, both the Dow Jones Industrial Average and the Dow Jones Transportation Average should be making new highs in unison, serving to confirm a healthy economy. Still we are in the age of internet now so this may not be applicable to the fullest degree anymore.
High flyers are now 20-30% discounted from top position and that is a lot of money taken away. Going lower for them (especially iconic companies like Facebook, Tesla, Google) would signal something more serious as these usually lead markets higher (as they did whole 2013). One possible outcome would be further bullish trend to grow and that friday's action was the bears strongest and possible last breath. But given he blow on Friday, i would lean to lower lows next week, so i suggest to stay on the sidelines if possible until proven a different direction. As i say, it is better to enter in a confirmed bull trend then in hopes of it - hope never works in stock markets.
PS - i am in no way a good elliot wave user, but it does look like the 5th wave. Some see it as a third wave