QQQ has hit my upper-most bounce target first posted here on Monday morning & if my analysis is correct, this morning's pre-market session highs in QQQ (TQQQ, NQ, etc..) should mark the end of the bounce that I was expecting after my initial downside targets were hit on Friday. I posted the following 5-minute chart (now overlaid with a 2-minute chart showing this morning's pre-market trades) in the Trading Room yesterday at the market's close with the following comments:
@schooner from the Trading Room pointed out to me a while ago how often he is able to successfully trade off the 5-minute time periods using this technique. He identifies likely A-B-C wave patterns after the wave “B” pullback has occurred, then he draws a trendline from the lowest to highest points of the wave A. He also uses TC2000 where you simply click on that trendline & select “Create Parallel Line” which will give you a duplicate TL. By adding that duplicate TL to the bottom of wave B, you get not only a projection of where wave C is likely to end in price, but as the slope of the TL is identical to the original, that also gives you an idea of WHEN prices will get there, assuming that the C wave is nearly identical to the A wave, as he pointed out to me is so often the case.
Either way, I created a trendline off Monday’s lows on my 5 minute QQQ chart and added the duplicate TL to the bottom of yesterday’s pullback (wave B). The horizontal line that the current wave C projects to is the same exact horizontal line that I posted as my upper-most bounce target in this post on Monday morning: http://rightsideofthechart.com/qqq-bounce-targets-3/
I have not edited or modified that TL in any way & although there’s no way of knowing right now if prices will get there tomorrow & reverse; get there & keep going; or even if today’s highs mark the end of this bounce, I do find it a bit more than coincidental that the cloned wave A-C TL lines up to that bounce target to the exact penny (and would be hit at 10:30 ET tomorrow, if the price & time symmetry played out perfectly).
Regardless, as always my stops for my short trades, particularly the TQQQ short, will be set somewhat above the actual resistance level to allow for a slight overshoot & stop-raid. I will communicate my thoughts on the TQQQ/QQQ active short trade shortly before or after the market opens tomorrow. (end re-posted commentary)
TQQQ remains an Active Short Trade with a suggested stop on any 60-minute period close above 114.55.