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I'm especially interested in feedback on this note from bearish, more
experienced list-members:
Did a smoking jacket level browse of Nasdaq 100 price patterns after
yesterday's close. (Richard Estes: I love your smoking jacket phrase
because I'm a newbie in a smoking jacket doing just a little "harder"
analysis and I recognize I need to do more.)
>From the Nasdaq 100 browse, I created a list of at least 25 of these that
have the following characteristics:
- Lower highs and lower lows before the recent big drop with many of the
pre-drop lower lows being made as large, black candlevolume bars
- The recent rally for these ~25 patterns has not taken out the necessary
old highs to establish a new uptrend
- The rally shows up on the candlevolume charts as mostly very small, white
candlevolume bars
- The uptrend rally on white candlevolume bars has ended and black rally
top candlevolume bars appear for the last 1-2 days (I traded this pattern on
Dell puts the last 2 days <g> )
- Nearest downside support for many of these ~25 is 10-15% away
The prominence of this general pattern in Nasdaq 100 charts is as great as
was the prominence of topping patterns in S&P industry indices that I
described in my note to this list on 10/26/97...
My plan is to try to pick out the most promising of these downtrending
patterns today. I'm expecting/hoping that today's market action will
support my buying puts on one or more these ~25 before the close today...
Question: What kind of market action today (Friday 11/7) optimally leads to
a significant downside move Monday/Tuesday?
Steven Buss
Walnut Creek, CA
sbuss@xxxxxxxxxxx
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