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Well it was a valiant attempt. The last 7 weeks up haven't been able to recover even the losses of the 5 week fall from the fifty day that began in early May. That's pretty quick down and slow and weak getting up.
Maybe you were like me and trying a few like WWWW, DHI, NCR, CSTR, TFM during the past few weeks. It sure hasn't been much fun. The only stock I feel bummed about missing was MLNX. If the strength is real, there are usually at least several stocks I wish I could own, but missed.
The initial explosiveness off the lows of new leadership like NSM, WWWW, LEN, RNF, SYNC & FRAN seemed strong enough to at least have the Nasdaq challenge the April highs. Now, Pocket Pivot volume and even follow on accumulation in NCR, SPF, HCA hasn't been enough to lift good stocks in the past 10 sessions.
I don't know if it will be a sharp break or choppy down to the June lows. It sure seems very unlikely to see a broad launch to Nasdaq 3000 without some capitulation first.
Nasdaq slicing though the 200ma and 50ma with a gap down tomorrow followed by a 4 week slide is also one of the options on the menu now.
I am looking forward to a nice clean out. 20%-30% down with most bases reset. If that happens-most likely after the election-we can look forward to a healthy and prosperous environment. Again who knows what the market will do but I think a good shake out is what we need. There are way too many frequent traders and a lack of institutional money right now.
It would be pretty unusual to take out the lows of the three waves down while the 200 dma is rising.
Usually three waves down will hold. See July 1992; Dec. 1994; Oct. 1998; March 2003; July 2006; July 2010; August 2011. I expect action a bit more like August 1992 with a one or two week challenge of the low with a higher low put in place.
Then again when I look at the daily chart of June 1992, I think that the lows of three waves down was undercut. And the 15 week set up looks similar to today's action.
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