Monday, March 28, 2011

NASDAQ Setting Up For A Potential Short Trade


If you read my last post you would know that I'm looking for a place to short this market. I tried entering a short position last week but that turned out to be a losing trade for me as the market continued to move higher.

If your look at the above chart of the NASDAQ, you will notice that the market had a doji yesterday  right at the 50 day moving average which is a warning sign that the recent rally may be about over. Today the NASDAQ formed a bearish engulfment pattern which is further evidence that the market may be ready for a move down.

On Tuesday, if I see today's low (Monday's low) taken out, I will look to short the NASDAQ with a protective stop right above Monday's high. Lets see what happens.

5 comments:

ben said...

How long do you think the market will correct?
Do you think the market will crash when QE2 is over?

Kevin said...

I am not looking for a crash, just a re-test of the low from 2 weeks ago.

Anonymous said...

starting to look like a good call


nice
Darin

Anonymous said...

I assume you went short this morning after the nasdaq broke yesterday's lows with a stop above yesterday's highs, correct?

Kevin said...

You are correct

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