Nasdaq 100: Predictable

A couple days ago we looked at who was in an Ascending Triangle. It was the NDX, which was following its leader, the Semi index. We have long followed the SOX>NDX>SPX leadership progression in NFTRH. I am not bragging about the call because this market and many individual stocks (like the Intel ‘calls’ right here in this space beginning on August 21) are routinely doing what the charts say they are supposed to do now. So what, did TAs suddenly become able to see things mere humans cannot see in charts again, or is this a sign of something?

I’ll say it’s the latter; the fact that the charts are ‘working’ again is a sign of a mature bull market that is crossing over into blow off dynamics where man and machine stalk its every move, playing every setup to the bull side, with momentum making the prophecies some people think they can predict in charts self-fulfill.

So boink, NDX has broken out. Here’s the chart from a couple days ago, updated. Every jockey and his brother are going to be on this.

ndx

Meanwhile, being actively bearish makes no sense. Sure, this could be a head fake with the world ending tomorrow. But I wouldn’t count on it. I am playing this thing with eyes wide open, thusly: taking some profits (at a slower rate now that we are accelerating), limiting losses (always, as needed) and making sure the portfolios are balanced.

I have added and am watching some lagging tech stocks with prospective charts (got to love those catch up moves in speculative markets) and the same goes for some large cap industrial and medical companies. I’ve also had a few stinker trades lately in the commodity area (hello Sugar and NatGas). So balance and staying in tune with macro issues like currencies (still very long USD and short the Euro) and interest rates is important as well.

And no, I have not given up on the Q4 top possibility either. Not at all. It’s just that what is… is. That thing going on with the chart above? Taken at face value it’s just… bullish. In NFTRH 467 we introduced a couple new analytical characters…

Question from student: “What do you make of this?” Answer in the form of a question from the Zen Master: “Is it bullish?” “Yes”. “Well then, that is what I make of it.”

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