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Sunday, October 10, 2021
MTU Weekend Ed - Consolidation (10/8/21 close)
SPX is likely consolidating ahead of another leg down. The potential structures of the rebound are a triangle (marked), flat (marked), or a larger B-up wave from the nominal low this past week (not marked). See chart.
Note also the the trend line (or av trend line) from March 2020 low and or subsequent important lows on SPX DJIA NASDAQ etc has been broken in the past month.
There can be false breaks of such but when a line has at least 3 points on it - 4 or 5 or more - make it more relevant, in this instance plus the fact the line covers a long period (18 mths) makes is more valid.
Usually mkt indexes do not run for than 18 mths up without a sizable correction.
On the long side we would normally need to see a lower price level before going long again. But always be flexible.
The tech position of component stks if these indexes also is relevant to this and you need to look at those - at least a 10yr chart - to get an idea of what position the indexes are likely in.
Stk like AMZN has traded sideways in the range of $2900 - $3500 most the time for the past 13 months and that trading area is at the top of a 5 wave (3 sections up) advance in the past 10-15 yrs.
On that basis you would have to conclude on probabilities that the past 13 months is the selling zone.
Other stks are in similar position while others made peaks years ago and are in the mid sections of a-b-c large deg correction.
The given the resistance trading zone for the past year is AFTER a decade long run up, the odds are it is not consolidation for further a advance.
There has only been one run over a decade from 1949-1966 but even then around 11 years into it in the early 1960s it met some resistance and corrections.
The DJIA bull run from 1988-2000 was 12 years (but there was low in Jan 1991 & Oct 1992) and interestingly 2009 -2021 is 12 years.
Note also the the trend line (or av trend line) from March 2020 low and or subsequent important lows on SPX DJIA NASDAQ etc has been broken in the past month.
ReplyDeleteThere can be false breaks of such but when a line has at least 3 points on it - 4 or 5 or more - make it more relevant, in this instance plus the fact the line covers a long period (18 mths) makes is more valid.
Usually mkt indexes do not run for than 18 mths up without a sizable correction.
On the long side we would normally need to see a lower price level before going long again. But always be flexible.
The tech position of component stks if these indexes also is relevant to this and you need to look at those - at least a 10yr chart - to get an idea of what position the indexes are likely in.
Stk like AMZN has traded sideways in the range of $2900 - $3500 most the time for the past 13 months and that trading area is at the top of a 5 wave (3 sections up) advance in the past 10-15 yrs.
ReplyDeleteOn that basis you would have to conclude on probabilities that the past 13 months is the selling zone.
Other stks are in similar position while others made peaks years ago and are in the mid sections of a-b-c large deg correction.
The given the resistance trading zone for the past year is AFTER a decade long run up, the odds are it is not consolidation for further a advance.
There has only been one run over a decade from 1949-1966 but even then around 11 years into it in the early 1960s it met some resistance and corrections.
The DJIA bull run from 1988-2000 was 12 years (but there was low in Jan 1991 & Oct 1992) and interestingly 2009 -2021 is 12 years.
Looking at NFLX it appears it is close to completing its 5 of 5 of 5 waves up. Your thts MTU ?
ReplyDelete