CMT_Association

Nasdaq Ichimoku Observations

NASDAQ:NDX   Nasdaq 100 Index
So basically, went back to the time since the post GFC crash. The interaction between price and the Ichimoku Kijun sen throws up some very interesting insights. Let's go a little deeper --

1) The Kijun is simply the highest high to lowest low midpoint of the last 26 periods, i.e. in this case, 26 months
2) The recovery post the 2008-2009 crash climbed above the Kijun sen in Sept '09 and then all subsequent corrections took support at the same line or slightly above it before the rally resumed
3) Starting Feb '16, there were 4 occasions (including the current one) when the monthly candle broke the Kijun via a bearish candle, but not in a single instance was the close below the Kijun. Also, in every case, the very next candle was bullish

So, couple of things:

1) We don't know how the month's close will look. The weekly has a hammer candle that's formed, but that's that. Nothing can be inferred from that except that bulls have managed to hold some critical long term levels, for now
2) Now, a sample size of 3 candles may not have statistical significance, but the recovery has been very similar each time -- this can't be ignored.

In conclusion, look for a close above the Kijun, even if the monthly candle ends in the red -- a close below the Kijun this month will be a huge red flag

We'll talk about next month when we know whether we survive this one. Have a good weekend friends. Keep learning and elevating yourselves.

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