February 2018 – Time to Correct?

I mentioned in the Idea Chamber last week that the NASDAQ Composite had met the minimum requirements for a Bullish Impulse wave to the upside and that a correction could ensue. This was due to seeing the minimum requirements of an Impulse wave to the upside and also reaching the 7,500 – 7,700 price range from the initial breakout from the 15 year Cup Pattern for the index. Not

The weekly MACD Histogram still suggests there is some buying momentum left, but it may disappear quickly with any heavy selling volume over the next week. As the index attempts any rebound towards its previous high around the 7,500 area, it is probably best to start trimming some positions and locking in some gains and increasing your cash position.

We may continue to dip towards the 6,750 area before attempting a rebound back towards the 7,500 level. You could start to lock in gains early this week, but I think a rebound towards the previous highs will happen and that may present a better opportunity to trim shares. I would not expect much other than a failure when the previous highs are re-tested though and a consolidation period continues. This consolidation period appears right on due with the 7,500 price level and breakout from the NASDAQ’s Cup Pattern I’ve written about previously.