Technology NDX traders are likely excited after yesterday's decline, but from a technical perspective much lower prices to signal a meaningful correction is underway. For example, a close below the April 24 gap in the Dow would signal a correction rather than a decline within consolidation. While shorting declines within aligned up impulses are very difficult, many do. They do so not only because of failure to recognize alignment but also sentiment. Market top, either bear markets or sizable corrections, are generally preceded by compression, aligned down impulses, and optimism.
What the public fails to realize is that the higher US stock climb the wall of worry, the more they will be forced to buy as they realized they've been duped by a steady diet of bearish calls (1, 2 ,3).
Trend Energy
DI and CAP define trend energy and help investors anticipate future direction. Investors should be asking whether or not stocks being accumulated as prices decline. If they are, only the fools that follow opinion (headlines) rather than the message of the market bet on a big decline. The Matrix tracks DI and CAP for all major US indices.
