At this moment NDX feels hot, but from a technical perspective, it appears to be forming a rising wedge. According to Investopedia, a rising wedge will most likely breakdown. (1) In contrast, we can see NDX formed a symmetrical triangle last year, which are not expected to be more likely to break up or down. (2) That symmetrical triangle was slightly rising, with a lower bound slope of 17˚ and upper bound slope of -13˚. By definition, the slopes of a symmetrical triangle must be similar (albeit inverse). I'd say that was the case. Amazingly, the height of its breakout matches "the distance between the initial high and low," exactly as Investopedia describes for symmetrical triangles. Almost spooky!
(1) www.investopedia.com/terms/w/wedge.asp
"rising wedge patterns indicate the more likely potential of falling prices after a breakout of the lower trend line."
(2) www.investopedia.com...metricaltriangle.asp
(1) www.investopedia.com/terms/w/wedge.asp
"rising wedge patterns indicate the more likely potential of falling prices after a breakout of the lower trend line."
(2) www.investopedia.com...metricaltriangle.asp
Why we should see a down turn I can't feel at the moment. The economy is solid, people are optimistic, the Fed's scary words have been said and the market jerked but then seems to have shrugged them off. What could go wrong? Well, things can change overnight, so you never know.