Markets pulled back significantly last week and we recorded a 126 points loss for Nasdaq in the recent lunar green period. With a new red period now starting stocks will probably remain under pressure. Let’s have a look at the Nasdaq chart (click image to enlarge it):
All my indicators point down and have further to fall before we can start looking for a tradeable bottom. Especially the slower Earl2 (orange line) is still very high. So I would just wait and see until the setup looks more favorable. A further drop to 4800 is not out of the question.
Could it go lower and fall below the August lows? Everything is possible, but I don’t think this market has topped out already. I didn’t see the kind of public enthusiasm and participation that normally marks major peaks.
Danny
LunaticTrader 