So here is my thinking on how to follow a trend, using the NASDAQ chart as an example.
- New higher high are formed in the next formed uptrend B, C no worry
- The next uptrend D didn't form a new higher high, a warning sign.
- So now the up trend wave E must form a new higher high, otherwise, the uptrend since March 9 may be in danger
- From the chart, wave E will make a new higher high, very expectable, refer to my previous analysis as well [1]
- As long as the reaction wave doesn't make new lower lows, the uptrend should be safe. So far, this rule works very well
Regarding last Friday's final pushing up, it is very expectable, as predicted in my previous post [1]. Another reason is the divergence between Euro and the US market, as mentioned before, US market will follow the Euro finally[2].
Usually, such final pushing up is very bullish, signals the bulls will get mad. That's why I predicted Monday will gap up.
I am so happy I have warned the bears to sell QID once QID broken down 38 , so far so good.
PPCO seems break out as predicted [3], although the volume is low.
EXEL should be fine if the gap can not be filled in a week.
FAZ is heading to $2, as predicted [4]
