Do you think the markets will fall next week?
- Thread starter TTT
- Start date
I always start my TA of every chart with a snapshot of basic set parameters. Results for the Dow are -
20EMA slope = upwards = Bullish
50EMA slope = upwards = Bullish
20/50EMA sequence = 20 is below 50 = Bearish
Bullish / Bearish close sequence of weekly bars = 2 up = Bullish (but not much)
Sequence of weekly bars not breached by 50EMA = 0 = Neutral
Sequence of weekly closes above/below 50EMA = 1 above = Bullish (but not much)
Is weekly close in top or bottom third of range? = top = Bullish
For me to take a long-term trend-following trade, the first 3 parameters must be in agreement. Usually, when a chart is reversing from Bearish to Bullish, the 20EMA slope is the first of the 3 to reverse, then the 50 slope, then the 20/50 sequence. FWIW, the Nasdaq and S&P are weaker.
Conclusions -
So far the snapshot looks like a story of a chart trying to turn bullish but its actually not making much progress.
There isn't a trend-following trade for me in either direction. If I was forced to trade this index, I would either a) set a sell order below Friday's low, or b) a buy above Thursday's high and a sell below Friday's low but I hate doing that as I don't have much conviction for either if triggered. I would rather short the Nasdaq (but not yet).
20EMA slope = upwards = Bullish
50EMA slope = upwards = Bullish
20/50EMA sequence = 20 is below 50 = Bearish
Bullish / Bearish close sequence of weekly bars = 2 up = Bullish (but not much)
Sequence of weekly bars not breached by 50EMA = 0 = Neutral
Sequence of weekly closes above/below 50EMA = 1 above = Bullish (but not much)
Is weekly close in top or bottom third of range? = top = Bullish
For me to take a long-term trend-following trade, the first 3 parameters must be in agreement. Usually, when a chart is reversing from Bearish to Bullish, the 20EMA slope is the first of the 3 to reverse, then the 50 slope, then the 20/50 sequence. FWIW, the Nasdaq and S&P are weaker.
Conclusions -
So far the snapshot looks like a story of a chart trying to turn bullish but its actually not making much progress.
There isn't a trend-following trade for me in either direction. If I was forced to trade this index, I would either a) set a sell order below Friday's low, or b) a buy above Thursday's high and a sell below Friday's low but I hate doing that as I don't have much conviction for either if triggered. I would rather short the Nasdaq (but not yet).
