The Nasdaq composite closed lower again today for the eighth consecutive day, and a total of 470 points to the downside. The last time I had a setup like this the Nasdaq bounced nearly 200 points up the next day.
That was the August bottom.
So here we are again in a veritable market free-fall and the notion of “enough already” is screaming ENOUGH ALREADY!
Eight days in a row has only happened on the Nasdaq composite four times in the past 20 years previous to today. There is no ninth day down. The NDX and QQQs have both had a time of nine straight declines and one instance of 10 days down in a row. So, of course another day or even two to the downside could happen but the odds are shifting to the upside.
These are the kind of sell-offs that make for big bounces and sometimes lead to longer-term rallies. We may not get the rally just yet but I’m looking for at least 100 points up on the Nasdaq and will play it with the 3x-leveraged ETF, TQQQ, with NQ futures and with QQQ calls.
The 10-minute chart below shows a rather steady and orderly decline with a little pop up on today’s close. If that pop can hold or at least not take out today’s low, believe there will be stair steps up for the rest of the week.
If not, there are always stops, a must.
(right click on image for a larger view)