Too Much Too Fast?
It is hard to be bearish this market and remember there are usually a couple 2-3 month windows each year when you feel like you can really put your foot down on the accelerator and play with size. We have been in the throws of one, but with a nearly 5000 handle move in the Nasdaq the last 2 months has the “easy” money been made? The WEEKLY chart below of the tech-heavy benchmark is coming back to the very familiar 20000 number, which it was unable to take out to the upside in a bull flag formation just several weeks after last year’s election. We know that from FALSE moves (bull flag broke downward) come fast ones in the opposite direction. The Nasdaq did not stop declining until hitting briefly below 15000 and touching the 200 WEEK SMA. The DAILY chart here shows last Friday registering a doji candle with a very tight intraday range which suggests some indecision. Additionally notice the Bollinger Bands constricting to some of the tightest levels in the last 6 months which indicates a big move, in either direction, is likely imminent. The last time this occurred in February saw the index break lower in a robust fashion. Remember the market tries to confound the most, so whatever you think is likely to happen be open-minded to the other side.