This is a Trendy Stock Charts NASDAQ Composite High Risk Alert! All gains from the previous follow-through day have been erased and a possible drastic move to the downside is setting up. We will get to the details in 3 different charts below.
Consider this a follow-up to this previous article I wrote:
Be certain to check out the summary for key price levels that need to be monitored in the next couple of trading days!
NASDAQ Composite High Risk Alert
This first chart for the NASDAQ Composite is a 10 year weekly candlestick chart. I chose a 10 year chart because it encompasses the entire uptrend since it began in March 2009. I chose a weekly candlestick chart because it provides a little more detail than a monthly candlestick chart. This extra detail is needed to help properly identify waves.
The MACD Histogram chart indicator, one of my favorite indicators when I analyze Elliott Waves, shows the highs amount of selling momentum during Octobers pullback. You will see on the next chart, a 5 year monthly candlestick chart, that the MACD Histogram reflects increased selling momentum.
This is a bear market right now by definition. The NASDAQ has pulled back more than 15% from its highs. So what does that mean when you combine the MACD readings on the weekly and monthly charts? Keep reading on to find out…...
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I calculate the probable reversal areas for the current downtrend using a combination of Elliott Wave analysis and a Fibonacci Extension Tool.
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