Nasdaq Composite technical outlook – some insights into TD Combo

The COMP closed the month close to but below the 200 month MA, which it even did not do at the low of 2002. I will show that in a different chart later this week, as we have the first prices for November in. We even closed below the monthly Bollinger Band.

The weekly chart on the left hand shows a weekly chart though and has another important message – we reached a weekly (setup 9 TD Combo) count and, as you can see in the other weekly 9 (green ones) counts, it usually marks a low point – not the ultimate one but a significant one. If you look closer, you see in all but 1 (I’ll explain later) the 9 bar is not necessarily the week it turned in all 4 other cases it took another 2 weeks and generally a slightly lower or higher point to turn. The basic message here is that we are very close and, from a distribution point of view, you could start buying or selling slowly. Always keep in mind, as this is called the ‘setup’ count, it usually leads to a so-called countdown count, which are the red numbers – that’s the only instance it did not mark a turning point. My experience is the green 9 count works well for weekly charts as a turning point but less so in daily charts. In daily charts, it usually counts to the countdown 13 before you might have a turning point. For the COMP the daily combo is at a 12 so another test of the low is missing to mark the 13 – but make no mistake, this is just a good indicator and I saw markets turning big time without completing counts as well. Continued in next post…

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~ by behindthematrix on November 3, 2008.

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