oops
Short

Nasdaq - lame duck ?

CME:ND1!   Nasdaq 100
201 3 1
I have noticed people are getting ready to pop their champagne when the DOW will hit all-time-highs soon, just shy away a few points (while forming a possible BROADENING TOP)...

But studying the Nasdaq it appears to be forming a different pattern, a potential Head & Shoulder and this could be the right shoulder. I am aware H&S are very often pre-assumed and didn't come about, I had my fair share of that... but that doesn't mean not watching out for new possible candidates.

Obviously Apple             is a leading weakening component of the Nasdaq, but nevertheless, this could be a major top and I am ready for a 38%-50% big retracement.

It appears the nice rally since 2009 unfolded in 5 waves ( I am not a great Elliot Waver though). The recent tops (so far) building strong resistance and if this current top hold, it certainly will create a H&S. (And by the way, even if the Nsdaq rallies pass the old high towards 2900/3000 it will produce a bearish rising wedge with negative divergence, but first things first). The trendline since 2009 is quite strong and has been tested several times and we also have rising moving averages . But we have a similar H&S formation on the RSI and a massive negative Divergence on the MACD .

If MACD gets triggered it is the start of a bigger correction.
By that time the trendline will be broken and I don't expect then that the 100d MA will be very strong.

This is a weekly chart, hence it will be a medium term play, so I am looking now on the daily chart for first constructive signs to confirm a reversal. Perhaps with a small unit as a start, I am debating if my stop should be just above the old high or should I add there and working a larger S/L because the risk/reward is quite interesting considering a quite large drop. I will certainly add more units on breaking the neckline and later breaking 100d MA.

happy trading
KP
oops
3 years ago
if you find grammar mis-spells, sorry, I am not English :-)
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admin PRO oops
3 years ago
Thank you for sharing!
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CoalMen
3 years ago
I am not English
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