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Friday Pre-Market Commentary

Yesterday saw the pullback in the broad markets that I was expecting & that selling has so far carried over into the pre-market session today, with the Q's currently trading around the 101 level. As mentioned in the trading room yesterday, one possible scenario would be that we are in the "B wave down" of an A-B-C corrective pattern following the recent major leg down. This 30-minute chart highlights the Feb 16/17th gap just below current levels which would be a likely pivot point, should the Q's reverse today and resume moving higher, at least into the close today as I'd expect.  I posted closing a good part of my long exposure before the close on Wednesday & my plan today will be to add some of that exposure back today, ideally from around the top of that gap (100.72 area down towards the bottom (99.80) area. However, I will likely close those trades out by the end of the day as I'm just looking for that one last thrust up as today is options expiration (OpEx).  (Actually, the Q's printed 100.90 in pre-market which is close enough for me to start scaling back into some longs).

QQQ 30-minute Feb 19th

QQQ 30-minute Feb 19th

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Feb 19, 2016 8:41am|Categories: Equity Market Analysis|Tags: , , , |5 Comments

5 Comments

  1. nico1971 February 19, 2016 8:52 am at 8:52 am

    Hey Randy if this is a “B wave down” of an A-B-C corrective pattern why would be scaling back at the end there possible more upside next week ? Thank Nico

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  2. astoria26 February 19, 2016 12:56 pm at 12:56 pm

    @rsotc I’m a bit confused, are you saying QQQ may eventually rally up to $109, most likely into next week, but you’ll close out today b/c you don’t want to hold over the weekend? Or you think today is the C wave up, and next week starts the D wave down again? Thx!

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  3. rsotc February 19, 2016 1:22 pm at 1:22 pm

    @astoria26 I can see how that may have sounded confusing. My thoughts are in the reply to nico1971’s question above. My original reply must have only went to his private inbox instead of under this comment thread but I also cut & pasted it in the trading room since it was a good question. Here’s my reply:

    Good question, 2 reasons (as to why I’m not holding out for 109): 1) I’m not that confident in the whole ABC thing merely just pointing out one possibility but more so, just trying to trade a possible OpEx ramp. 2) Nearly all but the shortest-term trend indicators are bearish, hence, I just don’t think this risk of possibly being caught on the wrong side of a fat gap down on Monday is worth the risk of hoping for an upside gap with a counter-trend trade. (end reply to nico1971).

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    • astoria26 February 19, 2016 1:34 pm at 1:34 pm

      @rsotc gotcha, that makes sense. I’m a bit skeptical of the $109 rally myself, so I’m with you!

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