The fourth & final near-term target on the previously posted string of QQQ 60 & 120 minute charts has now been hit. This is also the same as the first target that has been listed on the $NDX daily live chart for a while now. Therefore, the odds for a bounce from or around this level are elevated at this time. Adding to the case for a bounce from these levels is the fact that we have some pretty steep potential positive divergences forming on the 60 minute time frame, a criteria that I look for during a market correction to signal the likelihood of a meaningful (tradable) bounce or end to the correction & resumption of the primary uptrend.  This potential divergence (at least in my book) will be confirmed once we get a bearish crossover on the MACD, thereby putting a higher low in place against a lower low in prices on the QQQ (and a higher low in the RSI as well).

As such, I have reduced a considerable amount of short exposure and may take some longs in order to hedge or possible go net long for a bounce. However, it wouldn’t surprise me to see one last thrust below this morning’s lows before a meaningful rally takes place. The possibility of a continued sell-off towards my lower price targets on the daily charts can’t be ruled out at this point either. Translation: Although I am leaning towards a bounce from around current levels, my degree of confidence isn’t very high and as such, I am moving towards a more market neutral positioning until the dust settles and I have a better read on the next direction of the market. Also, my best guess for a “micro-call” on the market action today would be for one more thrust to a marginal new low today (below the LOD put in shortly after the open today) before a meaningful rally in the market.  Again, that’s just my best guess and calling all the minor zigs and zags of the market can be difficult.  Best of luck in your trading.

Updated 60 minute QQQ & the daily $NDX charts below.         Click here to view the live daily chart of the $NDX

QQQ 60 minute April 11th

QQQ 60 minute April 11th

$NDX daily April 11th

$NDX daily April 11th