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.


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


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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