• 4 hours What's Next For Hong Kong?
  • 21 hours Bitcoin Fails To Stay Above $10,000
  • 1 day Bill Gates And Big Oil Chase The Dream Of Nuclear Fusion
  • 1 day Top Jeweler To Use Only Recycled Gold And Silver
  • 2 days America’s Multi-Front Meltdown
  • 2 days Gold Up As U.S. Civil Unrest Escalates
  • 2 days How BlackRock Became King Of ESG Investing
  • 3 days Americans Don’t Care if TikTok Is A Security Threat
  • 4 days What’s Next In The Trump vs. Twitter Drama?
  • 5 days Escalating Tensions Could Crush $52 Billion China-U.S. Energy Deal
  • 6 days The Fed Is Printing Money At Unprecedented Levels
  • 6 days How Is The Real Estate Market Handling COVID-19?
  • 6 days Gold Flat As Markets Await Fed Chair Speech
  • 6 days What Is Day Trading And Is It Right For You?
  • 6 days Energy CEOs See Big Payouts Despite Oil Price Crash
  • 6 days Saudi Arabia Is Fighting A War On Two Fronts
  • 6 days 40 Million Jobless As Pandemic Fuels Economic Collapse
  • 6 days What Do India's Latest Reforms Mean For Its Coal Industry?
  • 6 days Copper Glut Continues To Grow
  • 7 days How A Pandemic Made Americans Better Workers
Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

  1. Home
  2. Markets
  3. Other

The NASDAQ 100's Head & Shoulders

The NASDAQ 100's chart below shows that prices fell as expected from the Head & Shoulders top formation. The drop was substantially below the neckline, below 1,590, completing and confirming the pattern, which means we now have a high probability that the NDX will decline to the minimum downside target of 1,550. This is arrived at by measuring the distance from the neckline to the head, and subtracting that from the neckline. From Wednesday through Friday, the NDX attempted to climb back above the neckline, but this effort failed - which is Bearish.

But this presents a compounded problem. The probability is high that the NDX is headed for 1,550 soon, however worse, 1,550 is the bottom boundary of the rising trend-channel since the April 29th low. Should the decline bust below 1,550, we are facing weakening support. All that would be left is the 200 day moving average at 1,532, then it is gang way below.

The Elliott Wave count for the NASDAQ 100 on the next chart shows that the wave 2 Minor degree top, a correction of the wave 1 decline from December 15th, 2004's 1,635.70 Primary degree wave (2) top, occurred on August 2nd, and the price action since then has been a Submicro degree wave {1} down, and {2} up. Wednesday August 10th's reversal marked the start of wave {3} down, and since then we've seen the first two waves of lesser degree.

1,550 is also an important target per the EW count, a possible target for {3}, as wave {3} would be 1.618 the length of wave {1} down at that level, although the first level of support is sooner, at the neckline of the Inverse Head & Shoulders pattern, around 1,570ish, and then the 50 Day Moving average, around 1,560ish. It is looking more and more likely that the Bullish Inverse H&S pattern is going to fail. Had this pattern cropped up at the end of a decline, it would have more reliability, however instead of occurring at a bottom, it is coming after a long run-up in prices.

We have developed buy/sell signals with remarkable correlation to stock market price movements, including the Blue chip stocks, techs, and HUI Amex Gold Bugs Index. Serious Traders, Investors, Advisors and Market Students should find these buy/sell signals invaluable.

What are these unique signals and why do they work? We have two independent indicators for each of three major equity market indices: The large cap DJIA/S&P 500, the NASDAQ 100 (which mirrors the QQQQs), and the HUI Amex Gold Bugs stocks.

The first indicator is a Stochastic that measures price and breadth momentum. When a Fast measure of this Stochastic crosses decisively above a Slow measure of same, we get a momentum "buy" signal. When the Fast crosses decisively below the Slow, we get a "sell" signal.

The second indicator is a confirming Purchasing Power Indicator™. This proprietary indicator measures the "power" behind a stock market move. It considers price, but also other factors that are building blocks of supply and demand. This is an amazing tool that generates "buy" signals when the power behind a move is so strong as to suggest that the probability of a multi-week or significant multiday rally is very high. It generates a "sell" signal when it identifies when the power behind a move is strong enough to result in a multi-week, or significant multi-day sell-off.

Because there are no guarantees in life, one benefit of the PPI signal is that if the market decides to take a bizarre twist against the signals, this indicator is smart enough to pick up the changes quickly before too much damage can be done and reverse course.

There's no guessing with these signals: they are cut and dried indicators, objective. Opinions, judgments, and investor bias is stripped away. Correlation has been nothing short of remarkable.

Here's how we like to apply these signals: When both the Stochastic and Purchasing Power Indicators issue new "buy" signals, we like to take a long position in the expectation of a rally. When both generate new "sell" signals, we like to go short, or step out of the market and wait for "buy" signals to reappear, anticipating a correction lower. We recommend always using stop losses.

Unique to these indicators, they have done an amazing job identifying prolonged "sideways" moves in the market. The probability of a "sideways" move occurs when one indicator is on a "buy" and the other is on a "sell." We are not aware of any other market analysis service out there that identifies high probability "sideways" moves. This information is critical for options traders as options lose value during lengthy sideways moves. In the options buying world, Bears win, Bulls win, and Sideways lose.

Here's the first of our two NASDAQ 100 trend-finder indicators as of August 19th, 2005, both remaining on "sell" signals Friday night. For the first one, the NDX 14 Day Stochastic Fast measure comes in at 34.00, the Slow at 33.00. Although the Fast is a hair above the Slow, it must rise decisively above it to generate a "buy," which it has not yet done. Correlation of these signals with price movement has been good, as indicated by the thick yellow directional arrows.

The second indicator, the NDX Purchasing Power Indicator™, comes in Friday evening at 63.53, and would need to rise 6 points to 69.53 to generate a "buy." Again, excellent correlation with price movements as pointed out by the thick yellow arrows. Thus with both key indicators signaling "sell," the odds are high that further decline is coming over the next several days and perhaps weeks. Since the Stochastic generated a sell on July 21st, 2005, the NDX fell 29 points, and is down 1.8 percent. Same is true for the PPI. Since it generated a confirming "sell" on August 5th, the NASDAQ 100 has fallen 29 points, or 1.8 percent.

To give you a chance to properly evaluate these phenomenal buy/sell signals, we are offering to those new to our work, a Free 30 Day Trial Subscription to www.technicalindicatorindex.com. To receive this trial subscription, simply click on our website link and email us your interest and we will set you up.

And finally, we are so excited about these unique indicators that we would like to offer you a special discounted annual subscription rate through August 31st, 2005 should you desire to add these signals and our other market analysis services to your trading/investing arsenal of advisory tools. Good tools are hard to come by in the battle of the markets. To win, you must be fully equipped. We believe our Stochastic and PPI indicators will make a critical addition to your market analysis toolbox. Simply click on the Subscribe Today! button at our website's home page, at www.technicalindicatorindex.com for more information.

Since 1999, this has not been a buy and hold stock market, not with the S&P 500 still down 21 percent, the Dow Industrials still down 10 percent, and the NASDAQ Composite still down 58 percent, and the NASDAQ 100 down an exact 67 percent -- over the past six years. No, it is a timing stock market, a trader's market, and that looks to be our future. In this stock market environment, to make money, good buy/sell signals are critical.

But, don't take our word for it. Check it out for yourself. Request a 30 day Free Trial Subscription to www.technicalindicatorindex.com, test drive the indicators, then take advantage of our reduced subscription offer before August 31st.

You have seen in this missive how we integrate a broad base of technical analysis tools to help our clients build wealth. In addition to these buy/sell signal indicators, a subscription will gain you access to our newsletters that cover the major U.S. Equity, Bond, Commodity, Precious Metal, and Currency markets, using multiple tools simultaneously, including Elliott Wave Theory, Supply and Demand, Momentum Measures, Dow Theory, Chart Patterns, Cycles, Sentiment Measures, Fibonacci Ratio Measures for Price and Time turn-date targets, and Analogs of Current Price Behavior with the Past to name a few. Check us out today and start making money.

"And as Jesus was about to go up to Jerusalem,
He took the twelve disciples aside by themselves, and on the way
He said to them, "Behold, we are going up to Jerusalem;
and the Son of Man will be delivered to the chief priests and scribes,
and they will condemn Him to death.
and will deliver Him to the Gentiles to mock and scourge and crucify Him
and on the third day He will be raised up."

Matthew 20: 17-19

"And though they found no ground for putting Him to death,
they asked Pilate that He be executed.
"And when they had carried out all that was written concerning Him,
they took Him down from the cross and laid Him in a tomb.
But God raised Him from the dead;
And for many days He appeared to those who came up with Him
from Galilee to Jerusalem, the very ones who are now
His witnesses to the people."

Acts 13: 28-31

Back to homepage

Leave a comment

Leave a comment