MasteringCS

MasteringCS

Last week I was talking about the formation of a right shoulder that could confirm a bearish trend. During the week the QQQ went up and down showing some volatility, but ended up breaking up a triangle pattern as shown below. The Head and Shoulders formation is still there, but we need to be careful since we are not attempting to predict the market, but to follow...

MasteringCS

Replacing the Nasdaq series with the QQQ ETF in order to include Volume and the Market Profile, we see that last week a bearish right shoulder was forming, giving interesting opportunities for short positions. Nevertheless during the second half of the week the trend reversed. The Head and Shoulders pattern prevails but we need to keep alert on the next movement...

MasteringCS

The right shoulder of a bearish Head and Shoulder pattern (or first Lower High LH1) seems to be developing in the Nasdaq, favoring short positions. This increases the likelihood of the "Significant Market Correction" I commented on my previous idea. If this pattern continues, the next possible target price could be around the daily 200 MA at 6800 approx.

MasteringCS Updated 

Looking at the long term performance of the Nasdaq Index we see that during the last two biggest drops, the Index was significantly away from its 200 MA. During the Dot.Com Bubble the indicator was 4.5 times above the 200 MA and dropped 75% in 2.5 years. During the Sub-prime Crisis the indicator was 1.7 times above the 200 MA and dropped 50% in about 1.5...

MasteringCS

After breaking the double head last week, the QQQ retraced this week to a possible new support level at 171. If the QQQ rises the coming week, a second daily higher low (from the February correction) would signal buys. Neverteless, the bull market has extended for so long (10 years aprox.) that a significant correction could arrive any time soon.

MasteringCS

Interesting move on Friday 9th. After reaching a double head pattern, where the volume market profile showed possible retracements to point 1 or 2, the market actually moved the opposite way, generating a positive gap and breaking the double head resistance. The positive trend seems to be gaining strength again. After the big retracement in February, we are seeing...