My short-term system, specificly, is much more based on time, when almost all systems are linear(price movement).My longer-term systems are more conventional and linear in their approach.
So even if your supports of 3840 and 3750 are broken, as long as we close at/near the LOWs I am still expecting a bounce Mon/latest TUE.
Don:
To me, price is the most important indicator, regardless of the time frame... It represents the actions of investors/traders at various prices and various volume levels... Historically, activity around certain price support and resistance areas has been indicative of future price action... An example of this is the break of NDX support in the 3940 trendline area and mini support in the 3840 area Friday... This reflects the forces of supply and demand at work... The fact that these two support levels were broken reflects the current oversupply of stock at those previous support areas... As the price drops it attracts a certain amount of buyers... This causes that sawtooth action in downlegs... As it nears the next support level (3750), it finds an area that has, in the past, brought forth a sufficient number buyers (demand), to meet that oversupply... It's all tied into investor psychology of buying and selling in waves... So, based on the recent breaks of support, the 3750 area becomes the next test...
If 3750 holds, we then have three rising bottoms on the NDX... That would support the bullish primary trend thesis...
Jim |
