I might be guilty to posting too many bearish patterns lately so here’s a nice bullish falling wedge shown with a primary and an alternative scenario. Of course, the QID is the 2x short $NDX so obviously a bit of humor with the whole bullish thing. All kidding aside, although positioned aggressively short once again, I am on the lookout for any signs to begin reducing my short exposure by either covering positions or taking some long hedges if the the technical picture and market action convinces me to do so.
As of now, things are playing out according to plan: yesterday the $SPX turned down just shy of the top of the resistance zone covered in the recent market video (1423.73 vs. top of the zone at 1425), AAPL so far turned down at the R1 area (590ish) on the recently posted 4-hour chart and the $COMPQ topped out at 3030.28 vs. the key 3030 resistance level also covered in Friday’s market overview video. Although the longer-term bearish scenarios would still allow for the possibility of additional upside beyond those levels, I believe that yesterday’s highs are significant and could prove to be the final peak of the first counter-trend rally in a new primary downtrend. If not, I will likely consider reducing my short exposure via covering positions or taking long-side hedges if the aforementioned levels are taken out by more than 1% or so. Here’s a daily chart of the QID (2x short $NDX tracking etf) with some potential targets although even when I trade the QID or any other NDX proxy, I prefer to use support and resistance levels on the QQQ chart (and sometimes the NQ e-mini futures) for timing entry & exits on my trades.