The Nasdaq Composite (COMPQ) swing chart created by Gannalyst shows the recent drop of 109 points in six calendar days as the largest drop since the move up from March began 59 days ago. This is the swing indicator to analyze to determine the strength of a move and the possible termination of that move. If price quickly recovers then we know that a drop of this magnitude is not catastrophic in this current segment of market activity. If price recovers but makes a lower high then it is time to close short term trading positions. Longer term trading positions should be evaluated against the weeks and/or monthly swing charts.
The SP500 index (SPX) has made the longest duration correction since the move up from March began. The number of points retraced has not exceeded two other counter trend moves during the run. Price could go either way from here. Caution should be considered/exercised with new positions at this point. Because the move has been reasonably strong for over 63 days it is not unexpected that price will make a significant correction at some point.
Continuing to appreciate your work, Andy!
A friend sent me this link, http://www.gannglobal.com/insiders-stock-market-paralleled-current-5-occasions-since-1886-09-05-11/
or might be at
http://cts.vresp.com/c/?GannGlobalFinancial/6179b198ae/4ef13d9375/84d0b2a56c
Apparently it has a video showing from this GannGlobalFinancial perspective, why they think there is a big bull market coming up. I haven’t seen the video yet but plan to a bit later this evening. In any event, thought I would run by you. Don’t want to sway you at all, but rather, curious if you think it is bogus or wrong? or have any merit, even as a possibility??
thanks in advance!
“Ariel”
Ariel – Thanks much. I’ll check it out this week. The last couple weeks have been nothing but work, little league, cub scouts, cook outs, and preparing for all of the above. I believe I will have extra time this week to catch up on market stuff.