The QQQ (Nasdaq 100 ETF) short swing trade has just hit the third price target (T3) in the pre-market trading session, with a tradable bounce likely (again), especially if QQQ makes a solid breakout above this 15-minute bullish falling wedge pattern. Bounce or no bounce, I still favor the additional downside targets, especially if SOXX makes a solid & sustained breakdown below the primary uptrend line that I highlighted in the recent semiconductor sector video.
QQQ 15m Nov 7th
Likewise, /NQ (Nasdaq 100 futures) is coming up on my fourth price target (T4), although it may reverse just shy (here) as QQQ is currently at T3/support. 60-minute chart below.
NQ 60m Nov 7th
Remember, QQQ remains on a solid sell signal on the more significant daily & weekly time frames. As such, with each tick lower (and each of my short-term price targets on the QQQ 15-minute & /NQ 60-minute charts), the odds increase of getting to what I call the P.O.R. (point-of-recognition), where Pavlov’s dogs (dip buyers) begin to collectively realize that something is “different” this time around, as the strategy (dip buying) that has worked so well for so long, suddenly isn’t working so well anymore. Once the P.O.R. has finally set it, support levels (such as this one) where the buyers “should” be stepping in, get cut through like a hot knife through butter, with little to no reaction (bounce or pause). Basically, we’re getting to the point where I start to trust counter-trend rallies about as far as I can throw them, especially if the semis clearly break.
Watch SOXX & those leading semiconductor stocks that were highlighted in the video the other day, with many right on or just above key trendline, price, or 50-day EMA support as once the majority of those supports are taken out, that will likely trigger a more impulsive wave of selling in QQQ & SPY. Remember, support is support until & unless broken. Active traders should stay nimble & ready to move fast in either direction, while typical swing & trend traders should have a trading plan & stick with it, until & unless there is a clear change in the technical posture or outlook.