Im going to offer a bit of follow up on the post im refering to here. In that post I was referring to a buying opportunity in the Nasdaq due to a very rare and reliable indicator, the overdone 10 day trin reading, which had to this point never failed. They say there is a first time for everything, and at this point im going to concede that, even though no setup occured using the price criteria I had in place, the closing Trin gave a false signal. Please refer to this chart swingtrader.net
As an investor or trader, it is very important that you maintain a perspective of the past. When markets become over bought, they are not unlike a runner in a marathon, they need a chance to rest. There are two ways they can rest, and that is to go sideways down or they can do both. A false signal is usually more powerful than the actual signal, especially when dealing with a signal that has never failed. At this point a logical "target" if you will for the Nasdaq Composite is under 1000 if we correct the rest of the way with price. If we correct with time, then one could expect 6 to 8 years of sideways action in the market.
Brandon |
