Happy turkey week! I got a lot of school work done and I did some recipe testing for my own Boba company so that’s good. I hope your week was just as eventful.
Analysis on QQQ is below the chart.
Above is the weekly chart of QQQ. Notice how the bearish weekly divergence is now gone, so it looks like momentum wasn’t as weak as I had originally thought. This move upwards has been quite explosive, but I think we will cool off and retest the 195 level before moving higher. Or we can just go up forever.
See you next week.
Hi everyone. I hope you enjoyed your week and have a wonderful Thanksgiving day next week!
I think QQQ will more than likely retest the 195 level within the next 3 weeks. I suspect we will move higher after that, but currently I am bearish in the very short term.
Notice how the weekly bearish divergence has mostly gone away now – hinting that this upward move has a lot of momentum. I thinking we still move down towards 195 in the near term before possibly moving higher. Either way, if we move down and get near 195, we should expect a volume increase and a large reaction there.
Have a great, peaceful weekend! 🙂
Below is the weekly chart of SPY (S&P500). I’ve calculated the percent increases to new highs from each previous peak. The average increase from the previous high is 2.6% over the last 3 times the index made a new all time high before pulling back. That would translate to a price of about 309 for when the index makes another move lower. Although I probably won’t short at these prices, I definitely would not be buying anything here since the risk/reward is atrocious.
Buyers can look for a retest of 300 before buying, and aggressive sellers can look for a move down to 300 for a quick trade.
Hi everyone. Indexes made new all time highs this week, and my quick short trade was stopped out for a loss. Thinking back on it, I think my stop loss was a bit too close considering the extra volatility indexes have near new highs.
Notice how the last 2 of 3 times the index made new highs, the index only went a little higher than the previous high before pulling back significantly. My short trade was banking on the double top pattern as seen in the middle circle above.
If we get any sort of selling pressure in the next week, I will consider going short again with a larger stop loss this time.
I didn’t think we would get another move up, but since we did, I decided to go short. My stop loss is in the 198-200 range with a target in the mid 170s. Below is the weekly chart of QQQ.
I’m a little concerned that we will reach 198-200 before a downwards correction, but we will have to see what happens next week. By the end of next week we should see which direction the stock market wants to go. I still suspect it’s down otherwise I wouldn’t take this trade.
Hi everyone! Welcome back.
This chart should be very concerning for bulls. Each time the index flirts with new highs, the RSI is lower – meaning the momentum has slowed down. Another move upwards is not unreasonable, but I think we will see a lot of selling beginning next week, or whenever we get anywhere near 195 again.
If I take this trade, my short target is the low to mid 170s, with a stop loss roughly 6 dollars above my entry.