QQQ is still testing the lower trendline (TL 1) with the alternative BOD or TL 2 coming in just above along with the key 200-day MA’s on the daily time frame while SPY (S&P 500) continues to test it’s comparable primary bear market downtrend line & key 200-day moving averages.
QQQ daily Jan 24th
QQQ sell signal to come on a break below this 60-minute uptrend line -or- on a rally into the primary downtrend line & 200-day MA’s on the daily chart. Also, note how the 60-minute RSI is at my nose-bleed overbought line around the 80 level which typically coincides with the end of rallies & the start of corrections.
QQQ 60m Jan 24th
For futures traders, one more thrust to put in a marginal new high on /NQ would be a divergent high & objective short entry, especially if QQQ runs into the primary downtrend line & 200-day MA’s on the daily chart. One more thrust up or not, the minimum pullback target is this 60-minute uptrend line & former T5 price support (which I ever so slightly tweaked to adjust for the recent candles).
NQ 60m Jan 24th
Bottom line: Despite the vigor of the recent rally, it still appears that the R/R has continue to shift from favoring longs to favoring shorts since the final targets for the recent longs (from off & around the lows) on QQQ & /NQ were hit, especially as with SPY at a confluence of major resistance & QQQ just below comparable resistance (bear market downtrend line & 200-day MA’s).
With MSFT reporting after the close today, TSLA tomorrow, followed by AAPL, AMZN, & GOOGL next Thursday, volatility & whipsaws are likely over the next two weeks and the market will likely decide if it wants to power through the key downtrend line & 200-day moving averages that have capped all major rallies since the bear market started over a year ago or if the indexes will once again get rejected followed by another leg down.