Final Shakeout?

We discussed last week our excitement after a bullish engulfing WEEKLY candle was recorded. On the chart below of the Nasdaq, we see that this weeks drop, although fractional, is a bit disconcerting. Notice the two prior occasions bullish WEEKLY candlesticks patterns were registered, the benchmark set off higher almost immediately. Now keep in mind a lot of times these bullish patterns are retested, and that could be the start of the process which is happening now. One concerning element is the fact that the Nasdaq is now beginning to CLOSE in the lower half of its daily range, a bearish trait. It has done so 4 of the last 7, although Thursday did record a daily bullish engulfing candle. If the old adage “amateurs open the market, and pros CLOSE it” is true it is not a good sign. I still feel constructive about the tech space, software in particular. Others spots to pick at may be TWTR if it approaches the very round 20 number again, say around 21.50, after finding precise support there on 3/18. That would be almost 50% from where Elliott became involved.

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