actio-et-reactio
Balance is but a brief transition between extremes.
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Tuesday, March 12, 2002
Price Island of Longs
I mentioned yesterday that a close below 1532 opens the door to lower lows. I musta been asleep at the console as the gap down open, which created a "price island" on the Nasdaq, was unanticipated. It is not a good sign for bulls. These smallish gaps have backfilled before, only to recorrect after.
Todays COMP low did hit the exact midpoint of the 2066:1697 move (1880), however the NDX punched lower. Being fundamentally skeptical of the new-found bullishness, I tread lightly and while acknowledging the power of bullish sentiment to move price, respect the pull of gravity. Capital preservation remains my guiding light.
One interesting observation is the 60m Nasdaq. I brought back the AB=CD chart, which nicely called the 1330 reversal. Price returned to the "B" high (1564), just at the "equi-time" half-cycle position. It looked like a reversal, at least a pullback, was likely and we got it. I do love when price and time come together, even as sloppy as this pattern was! Now, to better act on these (gg).
Labels: gaps
At last, over the rim
of the waiting earth
the moon lifted with
slow majesty
till it swung clear of the horizon and rode off,
free of moorings
- Kenneth Grahame,
The Wind in the Willows
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