Hey ajtj,
Been busy enertaining the family this weekend. To be honest with you, i cant even remember all that went into my selecting those targets. Good news is so far, they have been very accurate.
I do remember thinking last friay we may touch the lower BB on ndx which at the time was about 10-15 pts lower than the friday close. we had two things at work there at that time. the proximitiy of the lower bb and the full sto reading of 11.06 at the close on fri. Once the full sto gets to the 10 area, it is wise to be on high alert for a bounce. it may only be a one day event before heading lower, so that is where we have to look at other ta to decide to hold calls longer or sell them.
This friday the full sto closed at 7.19 so i am on high alert for the bounce. in the limited samples of the last 6 months, we have bouced the next day or gapped down the next day then bounced(early oct was a delayed bounce). The lower bb is now 36points below on the ndx at the 977 area which is awful close to the pivot low of 972 and corresponds to the 1319 for nas and 872 spx.
am i saying its not possible that we go to those levels? Heck no! anything is possible. I feel it is unlikely that we do. would they give us a better bounce point for support and ta reasons. absolutely yes. does that mean we go there before a bounce. not necessarily.
as for hitting the lower bb, exp pointed out to me that the dow and spx did on thursday(rut did as well). the nas ndx and sox have not touched it. there is important precedences for the ndx bouncing without touching the lower bb. i cant verify for sure but it looks like i see 4 relevant examples in each of the last 4 significant rallies and subsequent tops. the only one i cant verify for sure is the may june period of 01.
If dec 2 was a top(that we agree on) then we are coming down the other side just like these four examples. (may/june 01, dec 01, sept 02, and now on dec 02). we have a bounce to lower highs without touching the lower bb and then resume the downtrend. take a look and you will see that in the first bounce after a top we dont hit the lower bb on the last four tops.
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