Down Swing

There was a red Climax High signal in the Nasdaq on Monday accompanied by a big spike in the number of signals across the database. There were 706 sell signals in total, which was the highest in quite a while. So, it's not surprising that the market has been going down. On the chart below we can see the breakout last week to new highs (shown in bright green) from somewhat of a cup-and-handle or double-dip pattern. Actually, my CANSLIM expert friend says they did a study and C&H bases don't work so well on the indexes.

The top blue indicator line shows the number of Climax Low buy signals across the database, and the red line below it shows the number of Climax High sell signals. The sell signal in the Nasdaq index is shown as a red paintbar ("paintbar" is a trademark of TradeStation, Inc), and new highs are depicted as green bars.

The blue line is picking up again, so the market will probably try and bounce at some point.