I will be the first to admit that I am infatuated with searching for a calculated top in the stock futures indices. It’s like the movie National Treasure to me. One observation or clue leads to another potential pattern or conclusion. The chart channels I’ve outlined in today’s article for The Edge show my latest bias. It’s pretty evident to anyone that isn’t living under a rock that the stock market indices have been in a very dramatic uptrend since the low was made in 2009. My argument continues to be that the market cannot sustain this latest parabolic angle of ascent. I think this chart of the Nasdaq 100 futures index is a good example of how a market goes through definitive stages of maturity. I think an apt analog market that shows my technical bias would be the weekly Live Cattle futures contract. Remember, we’re looking at patterns here. We’re trying to see similar technical tendencies in the historic price actions of uniquely different and distinct markets. To me, the pattern similarities are too stark to ignore. In my opinion, both of these markets have the appearance of an acceleration to the top. The chart patterns are like a mountain. The higher you go, the steeper the angle of ascent.
I’ll remind you that the Nasdaq 100 index is one of the strongest uptrends out there. I’ll also remind you of the importance of sound risk management by using stop loss protection on short futures positions. We also have options strategies that can customize your risk exposure. But the bottom line is that there is risk. It’s our preference that you use us as your broker. We can help you understand these different strategies and how they may impact your entire investment portfolio. Trade with IFG. Trade with The Edge.
The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.