Welcome back to my blog!
I was surprised by the violent upward swings this week, but the bears still won. We have confirmed the trend line break and have broken back below the 185-186 level – hinting at a false breakout. Because of the false breakout, I suspect selling will accelerate or speed up. In case I’m wrong, a stop loss near 188 would be a good idea if you are short.
Good luck, and see you next week like always 🙂
Hi everyone, welcome back!
There are some significant and exciting developments to discuss today. It seems like the stock market is not liking the new tariff threats. This selling pressure has accelerated due to stocks being at relatively high prices.
Above is the QQQ on the weekly chart. Notice how the red candle breaks through the steep uptrend line. Now is a good time to sell, and I’m considering selling my FB shares that I purchased about a year ago at 175.
If you are trading the QQQ, I recommend putting a stop loss at or slightly above 190, because if QQQ heads back up to that level, it will most likely be a false breakdown. If you want to play it safer, you could wait for another red candle (further confirmation) on the weekly chart before selling or going short.
Hi everyone. Stocks bounced around a lot this week, but ended up flat. Since earnings for some of the big companies are out of the way, I suspect we will see more selling pressure next week.
From the lowest point at the start of 2019 to current prices, QQQ has gone up over 34% with only one significant down week. Since the momentum is still strongly skewed upwards, shorting here without a good sell signal doesn’t make much sense. However, I do think we start to move lower in the next week or two.
Please take a look at the QQQ weekly chart above. It has been 18 weeks with only one significant down week, and although QQQ is overbought and due for a drop, these upward moves can go on for a very long time. Since momentum is still pointed up, selling or going short doesn’t make much sense. Buying here is a little bit risky as well, so it might be best just to hold your current positions (or trim them) and look for future developments hinting at a peak.
Like I’ve been suggesting over the last month, buying QQQ and shorting DIA is a good, low risk pairs trade that I still recommend.
See you next week!
Hi everyone! Welcome back.
Most indexes continue to rise, and I think we will go up next week as well. Something to watch out for is the weekly RSI divergences which hints that we are at a medium term high (weekly chart means more medium term). Logically, we have gone up a lot since December of 2018, and are due for a correction. However, markets don’t always move logically, otherwise we’d all be rich.
I think we drift higher in the short term (a week or two), but I think we will close lower 8 weeks from now (end of June).
Below is a chart of the QQQ with the weekly divergence highlighted.
Above are QQQ and DIA on the weekly chart. We have approached all time highs and I suspect we will make new all time highs next week. Either way, I recommend buying QQQ and shorting an equal dollar amount of DIA for a low risk pairs trade.
Hi everyone. Despite my bearish calls in the last few months, stocks continue marching higher.
QQQ has broken above the high from 2 weeks ago, so I think we will move higher.
If you want a lower risk trade, I recommend shorting DIA (the Dow Jones), while buying QQQ. This pairs trade capitalizes on technology stocks outperforming the Dow Jones.
QQQ has strong upwards momentum on the weekly chart.