Where Is NASDAQ Headed ??

NASDAQ topped  out during July and November 2015 and has been in down trend ever since.

The following monthly and weekly chart of  Nasdaq  with Triple Trend Oscillator indicate an long consolidation/ bearish phase which can have serious implications for tech stocks worldwide.

Weekly charts :

1. The short and intermediate trend oscillator (TO) have fallen below zero and heading further downward with no signs of reversals or divergence.

2. The long term TO though above zero, is bearish.

3. The long and intermediate TO are still diverging, indicating further downside.

4. The current mini rally is just a pullback, to fall again to 4172 and further to 3950, which is the point of first divergence.

5. Nasdaq being in intermediate downtrend, all rallies will be sold into.

6. The trend will continue for an extended period which run in, for more than a year.

Nasdaq Weekly

Monthly Charts :

1. The longer term chart (monthly/quarterly) are showing negative divergence, which have bearish implications for long term and one will have to take stock, a few months down the line.

2. Any improvements in the chart will be first reflected on the shorter TO, which will have to sustain to improve the long term outlook.

3. The monthly chart shows fresh trend transition, indicating the trend is likely to continue.

4. During 2002,2009 Nasdaq dipped to touch the monthly 200 EMA, indicating a severe bear market correction. Though we are not assuming a 7 year  cycle, but 2016 is the 7th year from the last dip and  the monthly 200 EMA stands at 2800 presently. If Nasdaq were to hit a bear phase, the possibility of hitting that level cannot be ruled out.

Nasdaq Monthly

The Tale of Two Stocks

The euphoria surrounding Eicher Motors currently is the same as one witnessed around Unitech during 2007-2008.

One look at the chart shows how the stocks have zoomed in a  similar fashion backed by "Fundamentals".

However things don't take too long to go wrong !!! CAUTION !!

Why 7100 is Crucial for Nifty ??

UPDATE ( 19/02/2016) :  Nifty trading close to 7200. SO FAR SO GOOD !!! Immediately after our post, Nifty crawled back above 7100 and into the falling channel. How long will it sustain ?? The short term trend will indicate the future direction of Nifty.

Since March 2015, Nifty has been drifting in a downward sloping channel  as  part of a complex correction. The channel has its upper an lower level placed at 7950 and 7100 respectively. Nifty has, twice earlier touched the lower trend line and bounced back.

The present fall, however pierced the lower line, touching a low of 6869, which is the breakout  gap formed during May 2014. With the gap filled, Nifty now needs to get back into the channel and stay above 7100.

Nifty Weekly

Having made an attempt to get inside the channel, Nifty has again fallen below it, a fall which does not augurs well for the long term charts and opens up further bearish possibilities. The present fall has further deteriorated  the advance indicators on the Triple Trend Oscillator with the  TO showing accelerated downward momentum as against the previously developing divergence on monthly chart.

Nifty Monthly

 Indian markets have a history of  corrections lasting from 12 to 14 months of which we are nearing 12 months in the present corrections. With a 24% correction from the top already, will it be a repeat of 2008??

A failure of Nifty to crawl back into the channel and trade above 7100 immediately may open further downside to 6100 levels. The current macro-economic environment, both domestic and international are pointers to a bearish 2016.

With the union budget a few days away, there are no signs of  a pre-budget rally, the international events may be the only drivers for Indian markets in 2016. 

Apple : Gravity Catching Up ??

Defying gravity, Apple rose from $11 in 2009 to $132 in 2015.

But gravity seems to have caught up with the Apple  as after peaking at $132 in the second quarter of 2015, the stock is  in a bearish grip currently trading sub $100.


We had indicated a top in Apple as early as August 2015. See post.
 http://eqtrend.blogspot.in/2016/01/august-2015-calling-top-in-apple.html

The following long term chart (quarterly) paints a gloomy  picture for Apple stock price in future.

Apple may take support at the long term trend line at $80-82 which should hold. The divergence on the long term TO is worrisome, as if the long term trend line is broken, the stock may test $55 in the long run.

The price rise with lower volume during 2013-2015,  indicate distribution at higher levels with smart money getting out.

The best of Apple may be behind us for a long time to come.

Apple Inc. Quarterly Chart

Has Brent Found A Short Term Bottom ??

Brent Crude has corrected from $36 to $ 31  after it rallied from $27, the multi year low it touched on January 20th.

The short and medium TO moving above the long TO indicate, Brent  may have made a short term bottom and is ready to move higher to $38- $ 39 where it faces strong resistance from the falling trend line from June 2014.

The intermediate trend on Brent may just support this up move till the point of resistance which may last a couple of weeks.

The long term trend, however continues to be extremely weak, as all the TOs on the monthly chart continues to be bearish, indicating a further downside.

It may be a while before the damage caused to the long term charts can be repaired for Brent to have a meaningful bounce.

Brent Daily

Brent Monthly

Using Trend Dynamics for Positional / Swing Trade

Trend Dynamics i.e. the internal structure of a dominant trend can be used to understand the strength of a trend and trade profitably.

The convergence of  TOs of the lower degree indicate a weakening trend and possible reversal. This information can be gainfully utilized to tap the tops and bottoms and close the trading positions, adding substantially the profitability from the trade.

In the following hourly chart, the hourly TO (pink and green filled structure) is the dominant trend with its sub (minor) trends : pink and blue twin lines and green and orange twin lines.

The convergence and crossing of  green and orange twin lines over pink and blue twin lines (marked in yellow circles), indicate the ideal switch over points for positional / swing trade which can give optimum profit for the trades. This technique can easily add almost 25%-40% to the trade profitability.

Farther the TOs are from each other and the dominant trend, the more trending the price move is likely to be.

Here, again the trigger ( yellow dotted line) gives an advance information about the direction of the sub-trends.

Noticeably, the TO representing the dominant  trend, continues to lag and would not serve any useful purpose for taking any positional or swing trades.

Capturing Trend Dynamics with Triple Trend Oscillator

Momentum precedes the price. The Triple Trend Oscillators tracks momentum across multiple time frames  to plot them simultaneously as a single indicator.

As a stand alone indicator, Triple Trend Oscillator can by used to analyze trend dynamics at play within a trend.

Any changes in trends are first captured by the TO of the lower time frame and plotted well before the actual change takes place, thus preparing the trader to position himself well ahead.


Triple Trend Oscillator can be used for the following interpretations :

1. Understanding trend strength: Using the position of TOs in relation to each other and the zero line.

2. Trends across multiple time frames : Creating an anatomical structure of a trend.

3. Entry and Exit : Trigger crossover can be used as  precise entry and exit points for a prevailing trend.

4. Divergences : Trend reversals and transition generate divergences much in advance.

5. Trending and Range bound : The proximity of TOs to zero line or otherwise, give indication of trend quality.

6. Topping and Bottom formation : The patterns generated by TTO indicate tops and bottoms.

7.  Leading Indicator : By interpreting crossovers and transitions, TTO  can be used as a leading indicator.


The following chart of TTO and MACD shows how indications and signals are generated, divergences are captured, as the TOs of lower degree lead to help "Staying  Ahead" in a trend.

Notice how the trigger line crosses the TOs to generate an advance warning and subsequent transition of TOs of each lower degree above or below the higher degree TO. These crossovers happen much in advance, before any signals are generated on MACD.



For a detailed understanding on Triple Trend Oscillator, please download the PDF from the following link :
https://drive.google.com/file/d/0B5acZQyK9vNZcHU1cENBUmw0cnM/view?usp=sharing