NASDAQ Conclusion

Despite bottoming above the all-important psychological 1000 level, the total destruction of this multiyear bear market was on par with the greatest declines of all time. Quite frankly, the multiyear NASDAQ Composite chart is similar in structure and magnitude to the Dow Jones Industrial Average Crash of 1929. Although the Crash of 1929 was more severe, the NASDAQ Composite lost an astounding 80% of its total value and the devastation remains to this day. Despite the upside progress since the bear market low, the index has languished in comparison to the other major indices, as it has barely retraced to the all-time 38.2% minimum bear market level, as of this writing date.

The parabolic rise and ultimate decline of the NASDAQ Composite during this time was one of the most challenging trading environments that I have ever faced. Although I realized the extent of the impending bear market early on and stayed exclusively on the short side for most of this period, the initial failures of substantial bullish patterns, especially in those first nine months, taught me a great deal about their importance as continuation signals. Furthermore, the action in the NASDAQ Composite led me to respect the importance of the predominant trend in all trading situations more than ever before. Whether I am trading on a 5, 15, 60-minute, or daily time frame, I now analyze all setups with respect to the predominant trend. For the ....