Nasdaq‘s are looking to go lower in my opinion. It can be easily seen from the chart why I am saying so.

1. At point 1 from March 21-March 28, we were already seeing some deteriorating signs, with a increase in price but no volume, which in simple terms lesser people buying at higher prices. On the flip side the other 3 arrows in the chart show you some massive volume on days we are down. What it tells us is big institution want to get out on every bounce possible and sell it to so called bag holders  who call this buying the dip.

2. At point 2, from April 25-May 2, we saw what we call in technical terms as a dead cat bounce, once again look at the volume. It keeps on decreasing , which usually means retail investors trying to get in at those prices. On May 3 and  May 4, we get an epic flush. Take that bag holders once again.

For a healthy market, we always want the small cap index Russel 2000 leading the way, which means we want them to go higher if it really is a bull market, reason being people are more confident on speculative name s and are willing to take on more risk. However, the current state of Russell 2000 looks shady at its best.

My advice would be, this is the time to raise cash, if your an investor. Shorting stocks is the hardest thing to do, as it requires individuals with much more knowledge and sophistication. If your a day trader, then your dreams are gonna come true in a few weeks with increase in volatility imo. For retail traders, I would say stay out or be ready to get chopped out.

Check out my previous post about Goldman Sach’s Generation top http://ibankcoin.com/dchsn6/2012/04/10/goldman-sachs-generation-top/

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How Low can you go

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