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Strategies & Market Trends : Trend Setters and Range Riders -- Ignore unavailable to you. Want to Upgrade?

To: Susan G who wrote (16176)	4/22/2002 9:14:06 PM
From: Susan G	Read Replies (1) \| Respond to of 26752

Someone asked me about ABC corrections recently...here's a great example on the Nasdaq futures. This daily chart of the futures does not show all the gaps up and down as after hours candles are included. The same chart of the NDX shows the gaps, and therefore does not have this same complete ABC pattern. In a true ABC, it's a counter correction in a trend, so if this worked the way a successful ABC does, it would now break above C to the upside (red arrow). Unfortunately tonight it's looking more like a failed ABC ... The NDX, now has that Island reversal that was mentioned as a possibility a few days ago. We gapped down so I'm pretty sure it fulfills the "Rules" of an island reversal now. It is also in a descending triangle pattern, which is bearish, seen on this chart. That upper dark blue trendline that started at the top of the March Island reversal is the same dark blue trendline seen in today's 60 min chart. That downtrend line is HUGE resistance and you can see it was the top last week also. mywebpages.comcast.net Not only is it an island on the daily chart, but is really clear on the 60 min. 60 min NDX mywebpages.comcast.net Here is a chart of the Island reversal the NDX had at the March high, almost Identical and called the short term top. 60 min NDX March mywebpages.comcast.net The downtrend line from March 11 needs to be watched, as a clue the down move is over, as it's a breakout of that downtrend line that will start short covering and start the next snap back rally. Even if it's much lower, and days from now, those breaks of downtrend lines have started every one of the sharp rallies we've had in the past month. And it usually takes a few fakeouts/bulltraps to the upside before they hold, as we saw a few times recently.