The first chart below was posted in the trading room last Thursday. That 5-minute chart of QQQ identified some key near-term battleground levels between the bulls & the bears, along with the resistance level that was most likely to cap the rally that was taking place at the time.
QQQ 5-min June 21st
Fast forward to today & we can see that not only was that rally capped right around that 176.66 resistance level last week but from there, the Q’s went on to grind there way lower while firming up the bearish case on the more significant daily time frame, to gapping down below the “bears win” critical support level, essentially putting the nail in the coffin for the bulls.
QQQ 5-min June 25th
So now where do we go from here? Well as of a few minutes ago, QQQ essentially reached the bottom of my second target zone (T2 zone) on the recently highlighted & more technically significant 60-minute time frame. With QQQ down over 3% at the time, which is typically at the high-end of a daily percentage move, my expectation remains for at least a minor reaction off that level which so far is taking place as we head into the final 20 minutes of trading.
QQQ 60-min 2 June 25th
Hard to say just how far this bounce could go but what I can say is that QQQ now has significant resistance overhead & the recent sell signals on the even more significant daily time frame from last week have been even further solidified with today’s very impulsive selling.
Essentially, the R/R to shorting right now isn’t ideal but any rally into or even near resistance at this point could provide the next objective short entry or add-on to an existing short position. Likewise, an impulsive break & especially a daily close below today’s lows would also provide an objective short entry for a ride down to my next target around the 166.85 level (actual support, unadjusted target).
I plan to study the charts in more detail after the close today & will share any other thoughts or levels to watch that stand out. With that being said, despite any counter-trend bounces in the near-term, it appears that the odds highly favor more downside in the coming days to weeks+ at this time.