PRICE Rules Everything Around Me:
If the most recent 6 months have taught us anything it is to respect PRICE. I have been a strong devotee of it for many, many years but even I have learned some valuable lessons. PRICE supersedes all else, meaning any indicator, being candlesticks which I employ as well, or any other signal. They all react to PRICE so it is best to listen to it intently. The chart of the Nasdaq shows how it has just steamrolled over some bearish candlesticks, with a couple dojis in June, and a bearish engulfing candle on 7/13. Indeed there was some short term hiccups following them, but it did not take long for the index to catapult above them. On an RSI basis it is approaching 80, which could indicate it may be time for a breather, but keep in mind being overbought does not mean overdone. Perhaps the very round 12000 number will be a headwind of some kind, but it may be just temporary like the 10 and 11000 levels. PRICE will let us know when it is time to get bearish again, but expect some chasing into year end.