Tuesday, November 13, 2007
GETTING DOWN TO DIRT CHEAP?
The Nasdaq 100 has under performed the S&P500 as you can tell by the chart to the left. However, we are getting very close to testing the breakout on the $NDX:$SPX ratio chart. It is now time to start looking for a reversal pattern on the Nasdaq 100 as well as some of your favorite tech stocks. Look for a hammer, bullish engulfing or bullish piercing candle with much higher than average volume for a signal that the bottom is in. HERE_ are some examples of some other reversal candle patterns. Some are stronger than others,,for example the hammer with very high volume most likely is THE Bottom. Sometimes a weaker reversal only leads to a temporary bounce (which is a playable trade) and then the downtrend continues. The SECRET RECIPE chart shows that the $SPXA50 has not yet reached my buy signal for the SP500. I'll continue to wait patiently to put some money back to work in my retirement account, which could be tomorrow, who the hell knows. I'm sure the chart will tell me when. But for now my money is drawing interest at a very low rate, still that's better than it disappearing into thin air. Be sure to check out at least the 1st four pages of charts @RED DIRT TRADER CHARTS for some insight to the market.
Labels: candlestick charts, Nasdaq 100, sp500, stockcharts, technical analysis
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