While we wanted a low in May 6th week… we got it one week early. This adds a little caution for me on the longer term. But for shorter term (1 to 3 weeks) we elected a weekly bullish reversal in the NasDaq on the May 10th close. Today May 15th we got the test and I am exiting some long positions that were taken on the weekly close since my targets are hit.
How Reversals Work
- Weekly reversals need close on Friday
- Monthly reversals need close on end of month
Below is Before and After:
Weekly Chart Shows the Test of Reversal before May 10th:
- Notice the green arrow up to next green bar (if closed above)
- Notice the red arrow down to next red bar (if closed below)
Below is Today May 15th Weekly Chart:
- We closed on May 10th (Friday) above green reversal
- So it has probability to go to next reversal within 1 to 3 weeks
Whats Next?
Now we wait till Fridays close… to see if elections occur of this green bar. It looks like on a monthly time frame we June as our next turning point. So May could have some up move (if we elect weekly bullish reversals).
But… there is a panic cycle next week it appears — this will be caution for me till I see a reversal.
Will post as we get more data from the weekly close.