DISQUS

Rajshree · 10 months ago

" But right now we’re faced with a moment of truth, so to speak. All the indexes have been forming a lateral basing pattern that has developed into a well defined wedge. And that wedge is narrowing, and very near its apex. There are two possible outcomes to such patterns, either the markets continue there larger direction, in this case that would be down, or they break upwards. In either case, the break will be sharp."

Hi Zach What charts are you looking at for the markets ?
id appreciate your response.

Zach Bass · 10 months ago

I look at mainly three indexes, the Dow, Nasdaq and S&P 500 for general market calls. I also look at the Russell 2K and Willshire for confirmation. With each of these charts I examine multiple timeframes, that is I look at near-term (10, 30, and 60 minute charts), mid-term and long-term (daily, weekly and monthly charts). I look for indicators that are either in line or contrary to the time frames. I'm particularly interested in indicators that confirm across multiple contiguous timeframes, because that increases the probability of the read.

marcos · 10 months ago

If you tell me that today AAPL going up on such light volume is the same impact on charts as heavy volume, then I have problems with your analysis. To me, its a set up. Apple can drop like a free fall off El Capitan in a day with medium selling, not even heavy selling. So what is the guru forecasting?

Zach Bass · 10 months ago

Marcos, you are correct that volume is usually impact-full on my analysis, But it is not always indicative of the action, there are other factors that may trump volume at times. But not usually.

In the case with AAPL today we had about 60% of the average volume. Most of the volume came when driving AAPL up from its lows in the beginning of the session and near the end of the day. So on balance I would say there were slightly more buyers than sellers.

As far as my forecast goes, I think were still in a holding pattern heading towards a moment of truth when the lateral wedge that AAPL and all the indexes are in will finally make a decision as to which side of the battle lines they will move to. I think AAPL is biased to the upper and the indexes are biased downwards.

marcos · 10 months ago

Right, so then AAPL will be going up...or down.

Zach Bass · 10 months ago

Marcos, Marcos, I thought I was being clear. We're heading towards a pivot point, a convergence, the proverbial fork in the road. We could go up, we could go down. But whichever way we go, we're gonna go hard, because that's usually how we come out of these lateral or wedge patterns.

I can't provide definitive forecasts. All I can do is make my best analysis to determine the most probable direction. And what I was trying to say here is that we have something of a coin flip with AAPL more biased to the upside and the markets more biased to the downside. If the markets go down hard, then AAPL may still go up but will get tempered by the markets. Or at least it won't go down very far, probably into the strong support it has in the 89-90 area, with the next level of support around 85. If the market goes up, I can see AAPL taking out it's 50 day, then perhaps making a run for 102-103. The pattern measures out to as high as 115-120, but I don't think we'll see that.

Rajshree · 10 months ago

Thanks Ernie,
Is it possible to post the images of the charts of the markets that you are looking at.
i am looking at daily charts on all three major indices for different time frames, like 1mo,3 and 6 mos.
Also when you send the image can you also highlight the basing pattern or wedge that you were talking about so i will know what you mean.
i appreciate your help.
Thanks

marcos · 10 months ago

Zach your post is the bull. Frankly the long and dark road is heading towards a washout. This market has to test the lows again, big time.

Opportunity knocks · 10 months ago

thanks for the post