3SOF

We broke below this Bear Flag at roughly 2112 yesterday, which brought in more technical selling into the close.

That break put the June 14 low of 2065 IN PLAY.   

We're currently rallying off this morning's low, back toward the bottom of the broken Bear Flag.

Trying to anticipate a "good" outcome for a rally, I'm thinking that we might go down to 2065-ish on a Fed rate hike tomorrow,  put in a double bottom near there, then rally.

I wouldn't like to see us break that 2065 by much if we re-test it.

Basis the daily chart, the pattern off the June 13 low is a Bear Flag. 

On Monday, July 10, the bottom of the Bear Flag comes in at 1527.63.  A break below that would put the June 30 low of 1511.63 IN PLAY, and also would put 1448.33 IN PLAY.

Friday's close was 1533.77.

Basis the weekly chart, we've closed below the channel.  A dpwnside break below the 1511-1515 neckline would complete a one-year H&S Top.

Quote from: Melf Elf on July 08, 2006, 05:02:17 PM
A dpwnside break below the 1511-1515 neckline would complete a one-year H&S Top.

The NDX currently is at 1514.  Honor Thy Stops.

Quote from: Melf Elf on July 08, 2006, 05:02:17 PM
Basis the weekly chart, we've closed below the channel.  A downside break below the 1511-1515 neckline would complete a one-year H&S Top.

The NDX printed 1508.91 yesterday, but recovered nicely into the close, suggesting a possible downside fakeout.

Today, we've printed 1500, and we currently are at 1502.  We'll see how the NDX closes today, but as it stands, the fakeout looks to be yesterday's double-bottom that wasn't a double-bottom. 

Drat!   

The fact that we closed below the channel (blue line) on a weekly close last Friday, combined with the fact that we're now breaking a year-long H&S Top sure doesn't look friendly.  The positive divergence in the MACD last month produced about a  5% rally, but we've now taken out the June 13 low. 

Question to fous, maxi, or to anyone:

Does this break of the June low give us the "Hound of the Baskervilles" signal? 

The NDX printed 1508.91 yesterday, but recovered nicely into the close, suggesting a possible downside fakeout.

Today, we've printed 1500, and we currently are at 1502.  We'll see how the NDX closes today, but as it stands, the fakeout looks to be yesterday's double-bottom that wasn't a double-bottom. 

Drat!   

The fact that we closed below the channel (blue line) on a weekly close last Friday, combined with the fact that we're now breaking a year-long H&S Top sure doesn't look friendly.  The positive divergence in the MACD last month produced about a  5% rally, but we've now taken out the June 13 low. 

Question to fous, maxi, or to anyone:

Does this break of the June low give us the "Hound of the Baskervilles" signal? 

Quote

probably if there was a bullish macd divergance and the lack of interst in buyers has made this
a " dog that isn't barking"
more later,
maxi

"The market sold off because of problems in the Middle East."

Technically, this  is one of those situations in which the market didn't need any reason at all to sell off.  We already knew that the NDX:

1. Broke two-year channel support (blue line) on a weekly closing basis, on July 7.

2. Closed below the second Bear Flag/also Right Shoulder (red circle) on July 10.

3. Closed below the 1511-1515 neckline of a year-long H&S Top on July 12.

If the market were bullish, we likely would see these "fears" overcome fairly quickly, and the market would continue to rally.

Broke support...broke support...broke support...isn't bullish, especially not when it's the kind of support that we've broken.  That's a lot of technical damage done the chart.

There's always a chance that yesterday's break was a Bear Trap, but that doesn't seem likely.

Rallies back to broken support are common, so the NDX could rally back to the broken neckline at 1511-1515....or back to the bottom of the broken Bear Flag/Right ShouLder... or back to the bottom of the broken channel (blue line), but the year-long H&S Top is a ton of resistance to get through without any kind of base having been built.

The Bear Flag Target: 1448.46 is IN PLAY

The H&S Top Target: c. 1265 is IN PLAY (it goes ON HOLD if the NDX trades back above 1511).

I think we are in for a recession. Here are some of the following fundamental reasons the market is tanking.

1) World instability ex.(Iraq, Israel conflict, North Korea, Iran nukes, Nigeria, world wide terrorist attacks, etc.)

2) Rising Energy prices (Oil, electricity cost, etc.)

3) Rising Inflation

4) Declining Dollar

5) Cooling real estate market

6) Political polarism and division in this country.

Im sure we can add a couple more lines to this list once we progress down the economic cycle of a recession. Unemployment, business slowdown, foreclosures, etc. Looking at the history books it looks a lot like the 1970s recession. Seems to me the markets will be in limbo for the next 2-5 years. Only way to make money is playing the stocks on a short term basis long or short taking your gains fast!

Market near a top? Latest rally upward the last few days seems to be slowing down. Did we just hit a top today in the 1100s. Today seems like a safe day to enter short positions in the market.

Nice rally of over 100 points in the dow and over 25 points in the naz. The question is why did we rally? Economic data coming in shows slowing economy and rising inflation. So this rally supposely is based off the guess that the FED will surely pause intrest rates. This is dangerous assumption one would think. So that would say that at the current levels the markets are at the assumption that the FED will stop rising intrest rates is baked in. So if august 8th comes around and we are still trading near these levels there can be a nasty pullback if they raise interest rates again. If we are trading near these levels one would think even if they do pause the interest rates since its already priced in how much more can we rally up considering the negative outlook on the economy. If the FED chooses not to tame inflation and save valuation of the dollar. I will start pulling my savings out of the bank and putting it into foriegn ETFs, euros,  and commodities (gold and others).

Melf Elf,
So, is this another rising wedge (bearish formation) that we are seeing?

Quote from: beroznikmal on July 28, 2006, 03:09:40 PM
Melf Elf,
So, is this another rising wedge (bearish formation) that we are seeing?

Yes, b.  See comments in the QQQQ folder.

Market is up again!  good for longs bad for shorts hehe. Im fully positioned in 100% short slightly underwater on most my shorts but Im not going to cover. These rallies are on low volume and running on decent news not great news... I have a sense at these levels we are in line for a big sell off next week with the FED, of course everytime I think there will be a sell off it just keeps going up. The more I look at the situation, the more I think the FED is going to raise interest rates. Europe continues to raise interest rates and England today just raised their interest rates today. I believe reality is soon to set in.

That makes two of us holding out for reality