Observe the above chart carefully. This is the Nasdaq-High-Low index. Look at each of the BLUE arrows at the bottom of the chart. These indicate past lows in the market. Now if you check any of the market indices, you would see that these points roughly correspond to the market lows in the indices. Similarly the RED arrows on the top correspond to the tops in the market. To validate the reliability of this condition, I compared the last RED arrow which indicated a top in the market. As posted on the chart it seems that though this indicator pointed to a top in the first week of October, the market continued going up for another 3 weeks. But the action in October was very back and forth during this period as we all painfully remember and then the market took a big dive.
Now coming to the current market action and the bottom shown on the above chart for the week of Nov 12; are we in a bottoming out phase before the next uptrend begins ?
The BLUE arrow shown as market bottom in the first week of August proved that Aug 16 was the bottom for the market indices (about 15 days apart) and proved that buying the STRONGEST stocks during the bottoming out phase gave returns in excess of 50%. So where do we go from here- you be the judge as the market forces unravel their actions this week. Good Luck All !!
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