NASDAQ Rising Wedge, a Rebuttal:
This was posted to our Yahoo!Groups thread, in response to my market analysis. Since there have been other discussion here on SI about my analysis, I thought it would be interesting to post other points of view:
From: Paul Shread
Date: Tue Feb 6, 2001 10:36am
Subject: No rising wedge in NDX/QQQ
There is no rising wedge on the NDX or QQQ, IMHO. There have been no perfectly formed rising wedges on any major index on this rally, thus making it different from every rally since May. The NDX and QQQ are a rising channel, and the volume pattern has been bullish. Furthermore, rather than rising on the breakdown, volume has declined as we have pulled away from what was actually a steeper channel-within-a-channel. We touched the lower channel line at the lows yesterday. No compelling reason to be bearish here, and 2410 NDX/2600 COMPX is probably a relatively safe place to put on long positions. The price and volume action of the last month seems to indicate that the trend has changed, IMHO.
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Two Fed rate cuts have marked a major bottom 95% of the time since 1913, and in the one exception, 1929, the market rallied for five months. I think deciding something is a wedge without taking into account volume and the absolute lows and highs is missing what could be the beginning of a new bull trend. There may be a reason for further selling here, but not because of any rising wedge.
Best Regards,
Paul Shread |
