With QQQ closing just under 2% above the key 100 target/support level, I wanted to share a couple of responses from the trading room. Bottom line is that although a solid & sustain break & even a melt-down scenario is certainly a possibility, my current belief that that the market is at or very near a meaning reversal & although I plan to study the charts further today & remain open to all possibilities, my focus right now will be to start aggressively lowering stops & booking profits on my shorts while ready to pull the trigger & move to a net long positioning for a bounce off support, should the charts confirm. My recent replies/market thoughts below:
(reply to a question in the trading room yesterday around mid-day):
My best guess is that we will likely go down by Friday. I may very well be wrong but my thought process is this: During strong downtrends (just as with strong uptrends) bullish (bearish) chart patterns & trendline breakouts often prove to be false buy (sell) signals. That 15-minute QQQ downtrend line breakout the other day, which was a very well-defined & probably well-watched TL, which was also confirmed with positive divergence, could only be interpreted as bullish. However, being that nearly all trend indicators are bearish, the odds that the breakout above that downtrend line proves to be a bull-trap is well above average IMO. Not only that, but I believe that the Aug & Sept lows (100ish level on QQQ) is like a powerful magnet or a black hole (for lack of a better analogy) at this point & I would be quite surprised if prices didn’t at least touch that level once more. Being that the Q’s are already about 2/3rds of the way to that level since breaking down below the key 109.50ish level (bottom of the recent trading range & now, big overhead resistance), I think that the impulsive selling is likely to resume shortly. However, it’s just too hard to say that even if I am correct, that the market will or won’t hold up into OpEx by the close on Friday.
(reply to a private message within the trading room earlier today):