Friday, August 22, 2008
August 22, 2008; Here's Why I'm Holding My Positions
The Nasdaq Composite and Nasdaq 100 show similar patterns that are text book 5 wave impulsive declines with corrections stalling at their prior 4th waves (for now). The Nasdaqs have tended to lead the overall market all year. When they outperform the blue chips, it's bullish and the market is rallying, when they underperform the blue chips, it's bearish and the market falls. Well this is the third day in a row the Nadaqs have lagged the blue chips. Also, they've traced out a 5 wave decline unlike the blue chips. And their rally today is stalling in a typical resistence area of a previous 4th wave (see 15min chart above).
So the bearish structure of the Nasdaqs are keeping me in the game. Once those give way, and the technicals of the overall market look bullish, then I'll close my positions and become neutral until clarity re-enters the picture.