Nasdaq Sideways Projection
Princess Gwen here. A princess can't always get mice to sew her clothes, sometimes she wants couture, so her investments must be profitable.
Now that the Nasdaq has broken down and seems content not to break down further, I thought I'd do a longer term look at where I expect the market to go for the next few months. If we follow the pattern from 2008, there should be a long period of sideways trading here. I would expect to visit the 6,000 level once more to test resistance, and then to re-test it again sometime in the next few months.
What this really comes down to is that a lot of market participants are still bullish. It takes a lot to change people's opinions about a bull market. It's been an escalator to profit for so long, with so few bumps, that it will take a lot to get it to reverse. It absolutely will reverse, but it will probably take some time before the big anvil falls. In the meantime, expect some chop sideways. We're all waiting for the other shoe to drop. Somewhere, this market hit a bursting point, and something failed. We don't know what failed yet, but we'll see it eventually. Until then, trade with caution, and embrace the power of the Stop Loss.
Now that the Nasdaq has broken down and seems content not to break down further, I thought I'd do a longer term look at where I expect the market to go for the next few months. If we follow the pattern from 2008, there should be a long period of sideways trading here. I would expect to visit the 6,000 level once more to test resistance, and then to re-test it again sometime in the next few months.
What this really comes down to is that a lot of market participants are still bullish. It takes a lot to change people's opinions about a bull market. It's been an escalator to profit for so long, with so few bumps, that it will take a lot to get it to reverse. It absolutely will reverse, but it will probably take some time before the big anvil falls. In the meantime, expect some chop sideways. We're all waiting for the other shoe to drop. Somewhere, this market hit a bursting point, and something failed. We don't know what failed yet, but we'll see it eventually. Until then, trade with caution, and embrace the power of the Stop Loss.
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