The title of this post is a bit misleading as there really isn’t anything to update since the previous market update posted last Wednesday. As of now, all major US indices other than the QQQ/$NDX have yet to break above their previous highs which were put in place about 6 weeks ago, although most are just a stone’s throw away. The $NDX/QQQ, which was the chart shown in that last market update as well as below, continues to look tired with solid divergences put in place on the recent highs not to mention the fact that it printed a red close yesterday while both the $SPX & $DJIA managed to close comfortably in the green. In fact, the Q’s have essentially gone nowhere since that post last week, as yesterday’s strong gap up was completely faded and then some (bearish price action).
One day does not make a trend though so I’ll continue to watch the action of the broad markets for now. With the SPX & Dow so close to making new highs, I would almost be surprised not to see them at least briefly pop above their early August highs, possibly even trading above those levels for as much as a few days before coming back in to alleviate the near-term overbought conditions. The bottom line is that although this market has an undeniable bid beneath it lately, it may be prudent to keep things light at this time. (i.e.- Be very selective on taking any new positions and keep position sizes on the lighter-side until a more clear technical picture emerges). Updated QQQ daily chart: