I have to say there is a lot of extreme negativity and bearish sentiment out there at the moment. But if we have a look at the nasdaq chart what does it tell us.
Here are some important points to remember...
1) Since the end of JULY we have been trading in a nice upwards channel. Which means we have been seeing higher lows and higher highs. It means sentiment is bullish right now and not bearish like some are suggesting!
2) The QE3 announcement was only released days ago. This was one of the most major news items for 2012 and thus still takes several days for the hype and hysteria to dissipate.
3) We enter OPEX (or options expiry) week this week, which normally has a tenancy to show strength and bias to the upside.
There are many sell indicators now lining up on the charts and global indicies, we must remember the one simple rule of technical analysis, which states "THE TREND IS YOUR FRIEND UNTIL THE VERY END!"
When you see a chart like the NASDAQ above, that goes from the bottom left to the top right, that is not a bearish chart in my view, no matter how many amateur traders, go around kicking and screaming and swearing on their mother's grave that this is the top. Yes, eventually there will be a top, but why jump to conclusions here when we have no real evidence huh?
So lets hang tight and take each day as it comes, sit back and trade what you see, not what others are telling you, or base your trades on what you think "MIGHT" happen next. That is the fastest way to lose money and blow up your account.
bearish chart patterns setting up. Well there is no evidence just yet, the best thing to do is be patient and see what we get. It will be an interesting week. Happy trading :-)
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