Not surprisingly, the NDX which had triggered a Price Momentum Oscillator (PMO) SELL yesterday, whipsawed into a new PMO BUY Signal. With a rally that moved price higher by 2.08%, the PMO was jerked back up.
Unfortunately, the margin remains thin between the PMO and its signal line so the NDX could see another whipsaw on the PMO back to a SELL signal. I'll send out another bulletin tomorrow if that is the case. Of note, is what could be a very large head and shoulders pattern. If the pattern executes (and I'd need to see a decisive 3% breakdown), best case is a minimum downside target around 5500. In order to breakdown decisively, price would break below the 200-EMA. Whether this is a head and shoulders pattern or not, a breakdown below the 200-EMA would be very bearish and could see price drop considerably, although maybe not so low as 5500.
Wanted to keep you apprised of our signal status and the possibility of some serious downside action soon.
Helpful DecisionPoint Links:
DecisionPoint Shared ChartList and DecisionPoint Chart Gallery
Price Momentum Oscillator (PMO)
Swenlin Trading Oscillators (STO-B and STO-V)
Technical Analysis is a windsock, not a crystal ball.
Happy Charting!
- Erin
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