How We Predict Market Tops
A reader just asked us, "How was the Kcap Team able to define the almost exact top of the NASDAQ 2187, on this most recent rally?" Regular readers are aware that we have been focusing in on target NASDAQ 2185 - 2190 for the past couple of weeks. At that time the NASDAQ was around 2140. Suffice it to say that we used fundamental analysis to determine the larger trend, sentiment to determine the short-term trend, and technical analysis to narrow down our choices. A healthy dose of analyzing the stock markets' psychology is also a major component of our determination of levels. It is our experience that the best stock market forecasters often blend all of the major disciplines into their analysis.
With that said, we certainly do not intend on taking any victory lap. Mr. Market is much smarter than we are and is an expert in humbling all participants. Most traders' worst market call usually follows their best market call. For this reason we refuse to ever feel too good about ourselves nor too disappointed when we get it wrong.
There is no other way to describe today's action in the stock market other than disturbing. The Semiconductors reversed to the downside and joined their Small Cap cousins in a relentless decline. The market was not able to withstand the pressure from these two key groups. This has been our concern for quite a while. Key technical levels are in jeopardy.
The dip buyers have finally been hurt. We would not be surprised to see one or two attempts by this stubborn group of Bovines. However, the Bear shorts in waiting remind us of Clint Eastwood, "Go Ahead…Make My Day!"
The NASDAQ has support at 2135, 2120, and 2109. Whether or not any of these levels hold for more than a Dead Cat Bounce remains to be seen. The market internals during those bounces will tell the story.
If You Held a Taser to Our Head:
We are more than comfortable maintaining our Bearish position of only 18% exposed. Ultimately after a few failed attempts to bounce we expect the NASDAQ to make a stand around 2085 - 2090. There will be a time for small anticipatory buys during this decline, however save your big guns to react after the bottom is evident.
Hope you're playing defense. See you tomorrow. ___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (âKTBâ) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (âKCAPâ) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firmâs principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
___________________________
With that said, we certainly do not intend on taking any victory lap. Mr. Market is much smarter than we are and is an expert in humbling all participants. Most traders' worst market call usually follows their best market call. For this reason we refuse to ever feel too good about ourselves nor too disappointed when we get it wrong.
There is no other way to describe today's action in the stock market other than disturbing. The Semiconductors reversed to the downside and joined their Small Cap cousins in a relentless decline. The market was not able to withstand the pressure from these two key groups. This has been our concern for quite a while. Key technical levels are in jeopardy.
The dip buyers have finally been hurt. We would not be surprised to see one or two attempts by this stubborn group of Bovines. However, the Bear shorts in waiting remind us of Clint Eastwood, "Go Ahead…Make My Day!"
The NASDAQ has support at 2135, 2120, and 2109. Whether or not any of these levels hold for more than a Dead Cat Bounce remains to be seen. The market internals during those bounces will tell the story.
If You Held a Taser to Our Head:
We are more than comfortable maintaining our Bearish position of only 18% exposed. Ultimately after a few failed attempts to bounce we expect the NASDAQ to make a stand around 2085 - 2090. There will be a time for small anticipatory buys during this decline, however save your big guns to react after the bottom is evident.
Hope you're playing defense. See you tomorrow. ___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (âKTBâ) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (âKCAPâ) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firmâs principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
___________________________
Click Here To E-mail Comments
posted by Kleiner Capital Management, LLC. | 4:44 PM
<< Home