“Time” In the Equation:
Candles are a big part of my work and looking at them at extreme levels both to the up and downside and prior support or resistance helps formulate my strategy. Other things come into play but PRICE action to me is omnipotent and must be respected at all times. The daily chart below of the Nasdaq shows how time plays a role. Round number theory I use as well, and notice the bullish harami candle on 9/27 at the very round 13000 figure. That was a good start and one I felt offered good risk/reward. That theme is starting to lose its luster with me the longer the index decides to linger in the area. One wants to see a thrust off that level and at the moment, it is just not happening. Is the 26% YTD gain for the Nasdaq about all investors are going to get? If 2023 finished today I am sure many would take that. Are too many depending on the seasonality factors into year-end? Are too many aware of how many stocks are trading below their 50-day SMAs which historically can see bottoms form? Yes to all of the above and PRICE is the only one that knows the real answer. Respect it. It was admirable how the Nasdaq CLOSED Thursday but we need to see some follow-through.