Here we can see the September high and the current high, both times the Nasdaq was having a very hard time to make new highs at the end. My previous post on the Nasdaq, where i showed a potential double top, has not been invalidated yet. This is because that double top has formed into a bearish wedge. So unless we see a strong break up coming days, we will get to see that correction down from this crazy rally the past 6 weeks. Past week we also had the expatriation week of the option market, from experience, the pro's try to keep it at the level where most of these option become worthless. They write options (shorting puts or calls), so they sell them at high prices with the goal being to buying them back at low prices. With the uncertainty in the market of the past months, it's safe to assume that many investors have insured their long term positions with put options. With these put options, they make sure, that if the market drops, they make enough profit with their put options to cover the losses of their stocks.
If this was going on the past 2 weeks, we should see prices drop within the coming 2/3 days. Sometimes it happens on Monday already, but i have also seen it getting extended and extra day or 2. But when looking at the Dow and S&P, i think they already stop hunted enough short positions already to reduce their longs. The long positions they had to push the market up. So my best guess here is, we will probably start to drop tomorrow at the end of the trading day.
The bearish wedge for the Nasdaq
I assume my early followers know what my general direction of this market for the long term:
Just saw your TA and saw, that this idea is similar to mine. Just finishes a TA to the DAX.
Lets see if we will be right.
All the best,
Sascha