Zeev, I am kind of surprised you stayed in the traders overnight. The candle today is a reversal candle, but is it a reversal off the top, or the bottom? Here's what happened in 1990:
stockcharts.com[h,a]daclyyay[d19901001,19901027][pb50!b200][vc60][iUb14!La12,26,9]&pref=G
The next day we were lower almost the entire day. You may have an exit window to profit (you almost always end up green) but it may be slim.
The other alternative is that we keep going up from here, but that would mean a drop later next week and into July to new lows on the COMP.
The candle today is usually seen as a bottom reversal after a downtrend. After a stick like yesterday's, I'd have to call it a top reversal candle at this point.
Anyway, nothing seems to be out of the ordinary right now. We should still be on schedule for re-test on Monday or Tuesday (I was saying Friday or Monday before, but I shouldn't have counted yesterday as one of the days).
The one difficulty we're having is the end of month/beginning of month strength. That might be masking some of the weakness in the indices.
Put/Call is very bearish, and QQQ Max Pain is now at 27. Max pain at 27 points to a cap of NDX 1120 or so for the maximum upside off NDX 980 if it holds. That would work with the approximate 14% gain off a weak bottom I spoke of yesterday.
We could be looking at a re-test on the 2nd, a rally into the 10th for a high, a drop into the 15th, another high on the 17th, and a drop into options expiration, a flat correction, and a triple top failure on Aug 7.
I don't know how that meshes with cycle dates, but it just seems the most logical course of action off this weak low if it holds. |
