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Corrections

Speculation to correction risk: COSTNASDAQ:COST was over-speculated by retail groups. Extreme angles of ascent do not hold. The severity of the recent angle of ascent due to speculation warned well ahead of time that COST would have a meltdown when buyers evaporated. The first strong support level is at the black line. The Weekly chart shows stronger runs up than down. Costco is frequently speculated as there are retail gurus and chatroom groups, etc. that run the stock up from time to time. However, this stock is absurdly overpriced at this level and needs to do a split.
NASDAQ:COSTShort
by MarthaStokesCMT-TechniTrader
1
NASDAQ 100 Short Term Correction Risk AnalysisIt is important to know when the NASDAQ:NDX and a few of its components are overextended and that a minor correction, aka retracement, is imminent. It doesn't really matter if you can guess the exact day, but it does matter that you can see the risk coming so that you can plan to take action on open positions and plan ahead for new positions for swing or position trading. The Weekly Chart above shows where very strong support will kick in. Somewhere within the Green Rectangle, the index is highly likely to find support. This is a very strong support level since it is a yearly high, and that defines where fundamentals were before this earnings season. The only thing that could derail it is an UNKNOWN negative event for the Buy Side Institutions. That is a very RARE event. So that is the long-term view. Just for fun, let's check the Monthly DPO Cycle chart. Exactly the same line as weekly but in a more stark perspective. The cycle line is bending which is a good pattern, but it can easily peak and go sideways, which would create a dip into the index's support level if a correction goes all the way to or into that rectangle. Okay, now the daily chart to determine the short-term or intermediate-trend support level. The first higher Rectangle is weak support. Second, lower Rectangle is moderate. There are heavily weighted stocks that have fundamentals at or within these levels as well.
NASDAQ:NDX
by MarthaStokesCMT-TechniTrader
Mastering Impulses and CorrectionsHello, Successful trading in the stock market requires a comprehensive understanding of market trends and the ability to identify price patterns. One such pattern is the interplay between impulses and corrections. By recognizing these alternating phases, traders can gain valuable insights into potential market movements and make more informed trading choices. In this article, we will explore how to identify impulses and corrections in stocks and leverage this knowledge to guide our trading decisions. Understanding Impulses and Corrections Impulses and corrections are two primary components of price movements in the stock market. They represent the cyclical nature of stock prices, characterized by alternating phases of strong trending moves (impulses) and temporary price retracements (corrections). These patterns are largely influenced by the collective behavior of market participants, as supply and demand dynamics drive price action. Impulses: The Power of Momentum Impulses are the strong, directional moves that propel stock prices in a particular trend. They typically occur in the direction of the prevailing market sentiment and are characterized by higher volume and strong momentum. Impulses can result from a variety of factors, including positive news, strong earnings reports, or broader market trends. To identify impulses, traders should look for the following characteristics: Strong Price Movement: Impulses are marked by significant and sustained price advances or declines. These moves often occur in a relatively short period, indicating a surge of buying or selling pressure. Volume Expansion : Increasing trading volume during an impulse signifies market participation and validates the strength of the move. Higher volume confirms the presence of eager buyers or sellers, further reinforcing the direction of the trend. Break of Key Resistance or Support Levels : Impulses often break through important technical levels, such as support or resistance, further establishing the strength of the trend. These breakouts serve as confirmation points for traders. Corrections: The Breath Before Resuming the Trend Corrections, also known as retracements or pullbacks, are temporary price reversals that occur within an ongoing trend. They serve as a natural pause or breathing space for the market before resuming the dominant price direction. Corrections are characterized by price pullbacks against the prevailing trend, often retracing a certain percentage of the previous impulse. To identify corrections, traders should consider the following factors: Counter-Trend Price Movement : Corrections exhibit price movement in the opposite direction of the prevailing trend. These retracements can be shallow, typically ranging from 25% to 50% of the previous impulse's range. Decreased Volume : Corrections usually occur on lower trading volume compared to impulses. This decline in volume suggests a temporary reduction in market participation and reinforces the notion of a temporary price reversal. Support and Resistance Levels : Corrections often find support or encounter resistance at previously established price levels. These levels can act as potential reversal points, creating opportunities for traders to enter or add to positions. Using Impulses and Corrections in Trading : Recognizing impulses and corrections can provide valuable guidance for trading decisions. Here are some ways to leverage this knowledge: Trend Identification: By observing a sequence of impulses and corrections, traders can identify the prevailing trend. Understanding the broader market direction can help align trades with the momentum and improve the odds of success. Entry and Exit Points: Impulses provide opportunities for traders to enter positions in the direction of the trend. Once an impulse is identified, traders can look for suitable entry points during corrections, aiming to enter at favorable prices before the next impulse begins. Risk Management: Understanding the interplay between impulses and corrections can help traders set appropriate stop-loss levels. Placing stops below significant support levels during corrections can protect against adverse price movements while still allowing the trade to capture potential gains. Conclusion: Recognizing and understanding the patterns of impulses and corrections in stock prices is a valuable skill for traders. By identifying these phases, traders can gain insights into market trends, determine entry and exit points, manage risk, and develop effective trading strategies. Incorporating this knowledge into trading decisions can significantly enhance the chances of success in the dynamic world of the stock market. The above chart clearly shows you the Impulses and corrections on the Sunpharma chart. Good luck and all the best in your trading!
NSE:SUNPHARMAEducation
by thesharkke
$AAPL: Top or Not?Is this a top or just a sideways correction to pattern out excessive price gains that are above current fundamentals? This is the big question when studying stocks right now. NASDAQ:AAPL is definitely not a sideways trend right at the moment, but is it a downside run after a top? What is missing? There are 2 lower highs BUT just ONE lower low. To confirm a Top, you need the second lower low. AAPL doesn't have 2 lower lows at this time. The recent low is slightly higher than the previous first low. So selling short has high risk for AAPL at this time. Resistance for swing trades is at the red lines, which are the highs of each minor gap down.
NASDAQ:AAPL
by MarthaStokesCMT-TechniTrader
Patterns, CME Gaps & Golden Pocket RocketCheck notes on the chart. 1) Bearish Rising Wedge 2) Descending Triangle 3) Ascending Triangle Expansion Creating CME Gap, aka Futures Liquidity Gap. (These almost always get backfilled.) 4) Current Pattern, Bullish Ascending Channel. We had a fake out to flush the longs, and create liquidity, and to backfill the CME Gap. All other narratives are fun stories. We have since course corrected violently, failing to break out of the previous range, creating a Swing-Failure , which is locally bearish. This likely retraces to 23k, before a continuation higher to fill the next CME gap around $27,355 and $28,740 .. of course some profit taking, or other exogenous events such as the indexes falling could correlate with some pull backs, but ultimately I'm expecting 35k to fill this year. Strong resistance there, likely to struggle to get above. If it does, the next gaps that could be liquidity grabs are $45,000-$46,500 $52,500-$53,500 I don't believe we see a new ATH this year or next. 2025 is my target for ATH, which I believe we be a minimum of 130k and a max of 180k. I will scale out of positions between those two prices.
INDEX:BTCUSDShort
by TheTraderAndy
1
Using Fibonacci FAN to measure BTC correctionsNo matter what the outlook may be, if the price exceeds the 50 Fibonacci Fan level, there is a greater than 50% chance of a sharp correction and a possible reversal of the current bearish trend to a more bullish cycle. Optimism is not going to change this fact. I use it to measure the corrections. The Fibonacci Fan is a technical analysis tool used by traders to identify potential support and resistance levels in the market. It is based on the Fibonacci sequence, which is a series of numbers where each number is the sum of the previous two numbers. The Fibonacci Fan is drawn by taking two points on a chart and then drawing a line that is based on the Fibonacci sequence.
BITSTAMP:BTCUSDEducation
by armigoldman
W Bottom to Momentum Run Example: CATWeekly Chart of CAT: this is one of the Dow components that is nearing its previous all-time high resistance levels. It is one of the first few Dow 30 stocks to challenge prior all-time high prices. Caterpillar Inc. has been running with momentum that will now pause or stall at this level. Now, watch to see which support level holds as profit-taking continues. This is NOT a trading range but an intermediate-term correction ending with a W bottom. Important to note the differences. A bottom after a correction tends to set up for momentum runs that can sustain longer than they do within a trading range.
NYSE:CAT
by MarthaStokesCMT-TechniTrader
1
Making Sense of the Chaos and Recognizing CyclesHey everyone! Due to the recent financial sell offs, I've seen many panic and even claim "an end to financial markets". In fact, I understand their concerns. However, many of these individuals are newbs or have not taken a close look at the history of the asset(s) they hold. This is exactly why I have chose to begin posting again and would like to explore the long term history of a few assets and asset classes in an effort to calm any anxiety in others that I can. I will be focusing on historical market corrections. Nothing of what I say or demonstrate is individualized financial advice to any degree. I am a speculator. You should not place trades based upon my analysis. You should not listen to a word I say. This is for pure entertainment value only and any losses you take is because you took that risk yourself. I am not liable for your actions. Ok, let's do this! A very long term look at SPX shows a volatile ride. The chart you see is a monthly log chart compressed to demonstrate as much of SPX as possible. As you can see there are many ups and downs. The data provided dates back all the way to the 1870s. So, this is where I will begin. I will be adding pictures and details about the pictures in the updates or comments sections. It's been a while since I posted, please, be patient with me.
SP:SPX
by BACapitalManagement