Above is the weekly chart of QQQ. Notice that QQQ has run into overhead resistance at about 170. The daily chart has formed a bull flag, which hints that a break above 170 means we run to 178-180 in a couple weeks. As of 8 PM Mountain Time (10 PM Eastern Time), futures are up quite a bit, so I’m expecting a strong up-day on Tuesday.
The concerning thing on this weekly chart is the negative RSI divergence. Notice how we’ve made a higher high in March, but the RSI did not make a new high. Currently, the RSI is only at about 60, and we are approaching a new high again. As a bull, I wouldn’t be concerned unless QQQ breaks below 155. If we break below that, I’ll be mostly looking to short sell 🙂
The SPY is a bit weaker than the QQQ, but is still holding up nicely. Bulls want to see a breakout above 280, and bears want to see a weekly close below 260. My bet is that if SPY drops to 260, we will have a lot of panic selling as I think that support level won’t hold.
The DIA looks very similar to the SPY. I think if DIA breaks and closes below 235, we will see a lot of panic selling. Perhaps we could see a drop to something like 220. Bulls want to see a weekly close above 253. I think there’s a better chance we move up and break above 253.
See you Tuesday after the market closes!
Bigfry's Blog 