This comment was originally posted on a thread by The_Unwind who is a must follow on tradingivew and inspired this commentary I hope you find it useful or it helps all of us bounce around some ideas about the next few weeks and months ahead.
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This is going to be a choppy and difficult time to trade until trend gets re-established.... BUT one thing I come back to is remember AMZN will go into a Phase 6, and the Nasdaq is bouncing off of its Phase 4 line.. this buys a good amount of time for a substantial uptrend reversal. This could be the most dangerous of all bull traps over the next 2-3 months. A scenario that keeps playing through my head is AMZN will go into a Phase 6, probably soon, it along with the Nasdaq will resume a moderate uptrend for at least the next month possibly 2-3... it will have serious pull on the S&P 500 and help it also move up or consolidate with bullish bias. Until the Phase 4 in the Nasdaq is broken the S&P can be kept afloat or even strong. When AMZN goes into a phase 7, with NFLX already in a Phase 7, the dominoes will start to fall and eventually roll over. For now we just have to be patient and follow the market and use a bit of good old fashion tape reading skills to try and get an edge along with the technicals you present here on tradingview. One last thing remember that in 2000 when the Nasdaq crashed it still took the S&P and the Dow 6-8 months before they really caught up to the Nasdaq and entered bear markets. The other thing here is that the Russel 2000 might be going through its Phase 5 into a 6 as well. Putting together all of these themes leads me to think bounce/possibly significant/ultimate bear trap builds/markets breakdown but perception will be just like in the past, buy the dip no matter how serious the correction and consequently many people will get hurt. BOL on your trades and thank you for the great analysis!"
I just can't stress enough how difficult the next few months could be. These bull traps or even in the big NDX stocks in a phase 7 like Netflix still is causing some people I personally know to completely disregard the damage done to the stock technically (and fundamentally) that many act like this is a terrific buy in this damaged position. Same when it was in the Phase 6... Now it may be saved by the Phase 3 line and continue up, but the odds are extremely low and would take many months. Amazon will soon enter a Phase 6 and the Nasdaq appears to be bouncing off of the Phase 4... the Russel may be in a very large Hyperwave and will begin a Phase 6 at some point, all leading the S&P up... and all lining up for a massive fall, whether one after another or simultaneously. We need see through the noise, trade with the trend using the tools we have but keep in mind when things roll over the next time there are very few technical supports left to keep the market intact to the upside. BOL with your trades!
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This is going to be a choppy and difficult time to trade until trend gets re-established.... BUT one thing I come back to is remember AMZN will go into a Phase 6, and the Nasdaq is bouncing off of its Phase 4 line.. this buys a good amount of time for a substantial uptrend reversal. This could be the most dangerous of all bull traps over the next 2-3 months. A scenario that keeps playing through my head is AMZN will go into a Phase 6, probably soon, it along with the Nasdaq will resume a moderate uptrend for at least the next month possibly 2-3... it will have serious pull on the S&P 500 and help it also move up or consolidate with bullish bias. Until the Phase 4 in the Nasdaq is broken the S&P can be kept afloat or even strong. When AMZN goes into a phase 7, with NFLX already in a Phase 7, the dominoes will start to fall and eventually roll over. For now we just have to be patient and follow the market and use a bit of good old fashion tape reading skills to try and get an edge along with the technicals you present here on tradingview. One last thing remember that in 2000 when the Nasdaq crashed it still took the S&P and the Dow 6-8 months before they really caught up to the Nasdaq and entered bear markets. The other thing here is that the Russel 2000 might be going through its Phase 5 into a 6 as well. Putting together all of these themes leads me to think bounce/possibly significant/ultimate bear trap builds/markets breakdown but perception will be just like in the past, buy the dip no matter how serious the correction and consequently many people will get hurt. BOL on your trades and thank you for the great analysis!"
I just can't stress enough how difficult the next few months could be. These bull traps or even in the big NDX stocks in a phase 7 like Netflix still is causing some people I personally know to completely disregard the damage done to the stock technically (and fundamentally) that many act like this is a terrific buy in this damaged position. Same when it was in the Phase 6... Now it may be saved by the Phase 3 line and continue up, but the odds are extremely low and would take many months. Amazon will soon enter a Phase 6 and the Nasdaq appears to be bouncing off of the Phase 4... the Russel may be in a very large Hyperwave and will begin a Phase 6 at some point, all leading the S&P up... and all lining up for a massive fall, whether one after another or simultaneously. We need see through the noise, trade with the trend using the tools we have but keep in mind when things roll over the next time there are very few technical supports left to keep the market intact to the upside. BOL with your trades!
Note
It appears the bounce off of the Nasdaq/NDX/QQQ Phase 4 is beginning now. AMZN and AZPN appear to be entering the early Phase 6 stage... There will be some serious chop on the way up, requiring many trades to take profits and allowing drops for re-entry, be flexible and don't get comfortable. We are in an uptrend during the Phase 6/bounce off of the Phase 4 line so keep that in mind no matter how choppy it gets. Use your other technical tools to know where to take short term profits. Good luck and make $.Note
We had another down week this week, testing the Phase 4 line even going slightly below it Thursday morning before being rejected to the upside and it looks like now the week of Thanksgiving and week after we should see the Phase 6 of AMZN and AZPN beginning as well as a grind up in the NDX for the next few weeks. Be on your toes, best bet is to follow this trendline and only short with a close below the weekly trend line...until then we are still in a Phase 4 upmove
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.