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    Volatility Reports 07/16/20 Nasdaq Hyperbolic Peak

    July 16, 2020

July 16, 2020

Volatility Reports 07/16/20 Nasdaq Hyperbolic Peak

Volatility Reports 07/16/20 Nasdaq Nasdaq Hyperbolic Peak, in place. What supports this idea is equivocation by so many advisors and analysts on what this market is doing, and their subject lines or intros being “questions.”
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I’m sure not many recall the peak in early 2000 by the Nasdaq composite. It ended a secular bull market from the low in 1974. A great bull move. I wanted to point out the pattern at this inverted V top. For one it broke the upper channel of the long term trend from the ’74 low. Such “throw overs” are equivalent to investors paying any price for these shares of stock. The type of emotional investing old money likes to see for profit-taking.

Contrary Thinker’s volatility model on the monthly bar seen here signaled the uptrend was old, persistent and ready for a change. Please note that after the high in January and a month of decline the recovery – bounce – took a few months on backing and filling on the low side of L-T resistance – blue line – that was coincidental to 62% retracement before the other shoe drop.

Here is a snapshot of the composite from the wave [4] low in 2002, which reveals a similar set up at today’s highs. the throw-over the upper channel and the TEM reading of old, feeble, and ready for a change on the monthly bar. That is the Technical Event (TE) #3.  What else is nice is wave (5) is 2.618 times wave (1) and wave (5) is related to the length of the previous correction, wave (4) by the Fib-ration of 1.381.

On an S-T basis, the daily bar is saying that the tension behind the market is ready for a trend change as well, with a TE#3. The key price levels that would suggest a lower market are shown in the data window.

 

Chart patterns have not changed since the turn of the century, and the following were refined by the late Hank Pruden based on the work of Richard Wyckoff.  The Hypodermic Top is what the OTC index looks like.

Appears we are on the right-hand side of the high, with the daily bar making its peak on panic buying. again fitting with the hyperbolic top. The bounce high allows for a hedge off signal to be placed at 10,860. CT is still long the VX futures system.

More on inverse ETFs in days ahead.

 

Visitors at the “Volatility Reports” Group in LinkedIn need to opt-in as a subscriber before their free look runs out. 

Great and Many Thanks,

Jack F. Cahn, CMT

A Thinking Man’s Trader Since 1989,

Copyright 1989-2018

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