Hi everyone. I just realized that I posted yesterday that I missed the blog post on 9/18, but today is also 9/18 hmm… I guess it must have been just past midnight when I looked at the date yesterday. Anyways… here’s QQQ:
I mentioned 2 Fridays ago that I was expecting a move down in the indexes. That has happened, but now I suspect QQQ will bounce back to the 187 area by sometime next week. As you can see, QQQ has bounced off the 50 day moving average the last couple times, which also happens to be the bottom of the trend channel I drew in the chart above.
BABA is now below 160, and looks like it will slide even further. I still love the company fundamentally, but would stay away due to the technicals not looking good. There’s a slight chance I will buy some at or below 153 (the previous low), but will probably stay away for now.
Although MU bounced strongly off the low 40s towards the end of last week, I would avoid buying any right now, unless it is for a very quick bounce trade. Like I mentioned in previous posts, I think MU is entering the downward cyclical cycle now, where DRAM and NAND prices drop significantly and MU stock plummets. Again, this is just a guess, and I could certainly be wrong. I think in the next 3-6 months, we will see MU in the mid 30s.
Last week the markets dropped quite a bit off all-time highs, and now we are looking at a possible recovery (at least in the next few days). I think this is the next leg down, so selling your positions, or going short into the next pop up might be a good idea.
Also, I believe that MU is now nearing the end of it’s cyclical cycle, and will continue to drop further in the next 6-12 months.
BABA has also had some bad news, which has lead to it dropping below 160. This may be a good buying opportunity.
Here’s a chart of MU below.
Notice how price has moved below the 200 day moving average, and has stayed below that for a while. This looks extremely bearish to me, and hints at further downside.
BABA is at 156.1 as of this writing. Although I think this is a good price to add for the long term hold, the short term (2-4 weeks) points at more downside. I’m leaning towards buying some here for a long term hold. I will update you if I decide to buy some shares.
Hi everyone! Let’s look at charts for DIA, SPY, and QQQ.
If you prefer trading with the trend, it’s probably a better idea to wait for a pullback in the indexes, then go long for a better risk reward ratio. If you are aggressive, you may decide to short DIA with a target of about 251-253, and a stop loss near 262.
The SPY, which tracks the S&P500, also has the same gap as DIA. Staying long here in the short term doesn’t make much sense, so I recommend either selling now and waiting to buy on a dip, or going short here.
I originally mentioned that QQQ would be the top choice to short, but now it looks much stronger than the other indexes. I’m neutral on the index with a slight lean towards being bearish still. However, I would short DIA or SPY instead of QQQ at this point.
Today’s post will be more detailed since we haven’t had one of those in a while. I had a summer class and relatives/friends over so I had quite some stuff to do. I also recently started playing a lot of poker cash games (No Limit Texas Hold’em).
Below are the daily charts of the indexes:
The chart of QQQ is above. Notice that we’ve made a new all time high, but the RSI indicator did not make a new high. This RSI divergence suggests lower prices ahead (within the next 2 weeks). I plan to short QQQ near 185 with a target near 178, or slightly above 178. The stop loss will be about 3 dollars above my short entry. This is a risk reward of about 3 to 1.
The SPY 500 is looking more healthy than the QQQ. This new high is confirmed by an RSI with a similar reading on the previous high. Although I’m slightly bearish on the SPY, I wouldn’t short it, and would rather short the QQQ.
The DIA chart looks similar to the SPY chart, so I won’t waste your time discussing it.
MU has been a great trading vehicle for me over the last year or so. Anyways, I mentioned that I would be looking to aggressively buy in the 46-50 range (suggesting on the lower side), and that has proven to be a good plan 🙂
However, something concerns me with this chart so I no longer have a position anymore. The last three times MU rallied off a low, it retested that first low and then recovered. I’ve drawn those three rallies in on the chart above. Notice how the length of those moves are about 6-7 dollars each.
I suggest selling your entire position here (as a swing trader) and look to buy below 49 again (preferably near 46). I also think that this may be the start of a new downtrend, so you may want to avoid buying MU for the long haul. Of course, you can still swing trade it back up (or down).
Thanks for reading, and have a great week!
BABA bounced near the buy zone I mentioned last week, but I did not catch the jump up and still have no position. I will see if it looks attractive after earnings this Thursday.
MU is at a strong support level, and I expect it to bounce. I have not decided whether or not I want to take this trade.
This week’s update was also short and sweet because I’ve been taking less trades (and hopefully better ones).