Market Winning Trade Set-Ups for 07/26/2015
Trading Instrument: NAS100 (US NASDAQ stock market)
Closing Price: 4,570
Entry Order: SELL stop @ 4,551.00
Stop loss: 4,605.00
Take profit: 4,350.00
Analysis: This market is flashing VERY bearish technical indicators. While it is an admittedly early call, I believe we are tracing out the final stages of a Reverse Symmetrical Triangle. (Final confirmation of this pattern would only come as a result of a breach of the lower end of the reverse triangle at around the 4,300 price level). What I believe we are seeing is the end of the final upward "push" or "bear trap" in this market. After going sideways for the past six months, this market has recently broken out into new high territory. Rather than a reason for euphoria, I believe this new high is just a bear trap, and what could be the beginning of a large and precipitous decline in this important technology-based market index.
Technical analysis definition: An Expanding or Reverse Symmetrical Triangle, is also known as a broadening top, an expanding triangle or a megaphone top. The reverse symmetrical triangle is a bearish indicator, and the technical implications are usually extreme.
If I am correct in my analysis, the potential decline we could be looking at, can be measured from the bottom of the reverse triangle to the top - in this case it measures almost exactly 400 points. A bearish break-out would occur at the bottom of the reverse triangle, at or near, the 4,300.00 price level. So a 400 point decline from the break-out point projects to a targeted price level of about 3,900.00.
Long-term, buy-and-hold investors take heed. Ignoring these (impending) technical signs, could be dangerous to your portfolio health.
