Stocks drop a little for the week, but flash a big sell signal as bullish momentum slows. Double top with weekly bearish divergence = conviction sell.

Hi everyone. Market indexes have flashed a very big sell signal this week despite only dropping a little. The momentum indicators show that momentum has slowed, and we have also hit a double top. This is a conviction sell or short with a price target roughly 8-10% below the current high for a long weekly swing trade.

I haven’t traded for over a year, but I will likely take this short trade here myself. I’ll keep you updated. 

QQQ Weekly 9_21_2019.JPG

DIA weekly 9_21_2019.JPG

SPY Weekly 9_21_2019.JPG

Above are the weekly charts of the indexes – notice how they all look more or less the same. I hope you all enjoy the rest of your weekend. See you next week like always! 

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9/14/2019 Stocks squeak out modest gains for the week and flirt with all time highs. Strong bearish divergences are building up on the weekly chart – especially for QQQ. I’m bearish again.

Welcome back.

QQQ generally outperforms the market since technology stocks like Apple, Facebook, Microsoft and Amazon have been doing very well relative to the market. Thus, it is interesting when QQQ is significantly weaker than the Dow Jones and S&P500.

Here’s the weekly chart of QQQ. Notice the bearish divergences (same or higher highs, but lower RSI). I’ve circled the price level I think we are likely to retest. QQQ weekly 9_14_2019.JPG

 

9/2/2019 Stocks bounce for the week, but indexes look like they are in a trading range and are bound to move lower in the next week. Still bearish short and mid term.

Hi everyone, I hope you have a great Labor day and are enjoying your weekend!

QQQ Daily 9_2_2019.jpg

Here’s QQQ on the daily chart. Notice how the index has faced resistance at the top line multiple times now. I suspect QQQ along with the other major indexes move towards the bottom of this trading range in this upcoming week. For QQQ, that corresponds to the 180-182 range. DIA and SPY (the other two major indexes) look a little stronger, but are bouncing off the top of their trading range on the daily chart as well. 

8/11/2019 Stocks get slammed to start the week, but close neutral. I’m leaning towards more downside in the next few weeks.

Hi everyone. During the last few weeks I mentioned that QQQ would likely drop to the 170-175 level before we move higher. During an after hours session earlier this week, QQQ actually did hit at or near the 175 level. Take a look at the weekly chart of QQQ below. 

QQQ weekly 8_11_2019.JPG

Notice how we are still coming off a weekly divergence (higher high for the index in terms of price, but a lower RSI for the most recent peak), so I still expect QQQ to move towards that 170-175 support level. Since we are still in an uptrend, buying instead of selling is what I prefer when I trade. Instead of selling or going short here, buying in the low 170s looking for a bounce back to the low 190s seems like a more logical move.