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Alternative Nasdaq Summation Chart

May 26, 2011 11:01 PM ET
Jeff Pierce profile picture
Jeff Pierce's Blog
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 This is a neat chart used to confirm weakness or strength in the market. Basically when the Nasdaq Summation goes above or below the bollinger band then a strong trend has emerged. Use the ADX  to confirm that trend and Bollinger Band Width indicator to see volatility picking up, which could add fuel to the trend.

When the -DI line is above the ADX, with the ADX line moving higher, a firm trend is established. When the BB Width indicator is at low levels relative to the last 4-6 months, and it starts to move higher, then the trend should be accelerated as volatility picks up.

Market Timing Update:

No changes as downtrend is firmly in place. I’m currently looking for a entry to add the shares I covered. As long as there is no positive divergence on the McClellan Oscillator that is seen behind the Dow chart, the trend should remain down. My first target in the Dow is the April lows, but

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