We are witnessing a classic selling climax which may happen on Monday.
Based on my read Nasdaq may breach 200 DMA which sits @ 3936.25......
Not only Nasdaq may breach but it may go below 3900 to 3890 area......
Based on my read S&P 500 should hold 200 DMA which sits @ 1761.43.....not only it should hold but it may rebound without breaching it.....
Currently 200 DMA on Nasdaq is only 1.57% away but in S&P 500 it is 2.97% away.....
We may have strong support in mid point of those two %....which is a downside risk of further 2.27% as an average......never realized math will come handy in technical analysis......
Looking @ my crystal ball....we may see a higher than low close on Monday......which will be a "technical victory" based on all the pessimism we have......
We are currently "technically deeply oversold"...so a bounce is imminent.....
Biotech is down 7 week in a row & is down 21%...a bear market move....
There are optimistic signs already happening, there was inflow of $8.9 billion in equities in the week of April 9, 2014.......@ the same time outflow from US treasury which is first time in 4 weeks.....
There is optimism in US economy as jobless claims have fallen to a level not seen in many years......
Consumer confidence is @ highest level.....sign of good things to come in terms of retail & technology spending.
When S&P 500 & Nasdaq has the worst TAPE since June of 2012......we may be extremely close to a "major turnaround"
BUT...one reality will still play out that PE matters......do not go bottom fishing on high beta stocks which has "no earnings"...that game is over for a long time......
SO...get your high earnings growth stocks list out & buy aggressively @ open on Monday...you never know you may be buying stocks @ lowest point as fear is rampant......
Good luck with your own take of this market.
Buy close to low, sell close to high still works......
BLOG does NOT give buy or sell.
Saleem
4 comments:
Hey Saleem,
I was late to get my recap/outlook out as the tax deadline of Tuesday took most of my time this weekend. I have posted it now under your Friday evening blog as usual.
This is some of the worst price action we've seen in a while and it caught most people by surprise late week as jobless claims hit a 7-yr low--should be good, right? I think the overall confusion is contributing to a "sell first" attitude with many traders/investors.
Stocktrader
Hi Stocktrader,
Traders are afraid of this TAPE based on recent downward move.
Hopefully we build from here.
Saleem
Hey Saleem,
Every single uptick makes me regret I sold my software babies. I am having a hard time being patient, and I usually mess up this part of the trade.
Stocktrader
Hi Stocktrader,
Decision are made but new decision can have the benefit of hindsight....
Go with the flow...flow is higher now...
Saleem
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