A Picture-Perfect Pullback
Some people will never get it. To them, every pullback is a random event, with no way to see any sign of a bottom ahead of time. They see every tick of every index as being as whimsical as the direction of the wind from one minute to the next. Fortunately, that's not the way it is. But most people think that because the word out of Europe is bad on a given day, the market might sell off 200 points, or, maybe it won't sell off at all. That's all there is to it. And if it does sell off, where it stops, nobody knows.
In fact, these pullbacks are not random at all. This latest one that bottomed yesterday morning was picture perfect, and if you read my column on Tuesday, aptly titled, Don't Give Up the Ship, you were expecting it to bottom where it did and you weren't surprised in the least. I telegraphed the pattern about as clearly as I could, explaining that in the Nasdaq Composite it looked like a completed pattern with Tuesday's pullback to the 2900 level. This marked a neat double-bottom with the March 6 lows. I noted, "While the Nasdaq is suggesting that a possible low is already in place, the S&P 500 suggests that a slightly lower low should be seen. Here, after filling the March 8 gap this morning at the 1352.63 level, there remains the March 7 gap, not far below today's lows at 1343.36."...511 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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