Clicky

QQQ Bull Trap Scenario May Be In Play

Here's a quick look at QQQ on various time frames starting with the 15-minute chart. Today saw the Q's open with a pop, only to see that post-opening pop immediately faded with another failure at the R1 resistance level followed by impulsive selling into the close today with QQQ closing down 1.16% in an abbreviated trading session.

QQQ 15-min July 3rd

QQQ 15-min July 3rd

Moving out to the 60-minute time frame, QQQ failed at resistance with an impulsive reversal just as it looked like a decent rally was getting underway following the recent bullish falling wedge breakout & successful backtest. Should QQQ continue lower when trading resumes later this week, that will help firm up my bull trap scenario. As I often say, fewer things are more bearish than a failed bullish breakout. Also note that the PPO signal line (9-ema) is still below zero, keeping that trend indicator on a sell signal for now.

QQQ 60-min July 3rd

QQQ 60-min July 3rd

Last but certainly not least, should the large negative divergences that were put in place at the most recent high on the daily chart play out as expected, we could very well be looking at another 12%+ downside in the Nasdaq 100.

QQQ daily July 3rd

QQQ daily July 3rd

Just a reminder that the US equity markets will be closed tomorrow in observance of Independence Day. Wishing all here in the U.S. a safe & happy holiday and best wishes to everyone else!

-RP

5+
2018-07-03T16:07:34+00:00Jul 3, 2018 4:07pm|Categories: Equity Market Analysis|Tags: , |9 Comments

9 Comments

  1. BIGBADWOLF July 3, 2018 4:17 pm at 4:17 pm

    Thanks for the analysis Randy! Happy holiday to you too. Any thoughts that the third rejection from around 7000 level for NQ would cause a short squeeze like crude?

    1+
    • rsotc July 3, 2018 4:46 pm at 4:46 pm

      Could you please clarify? Are you asking if the 3rd rejection from NQ 7000 might cause a short squeeze in NQ? The 3rd failure on that test of resistance is bearish & as such, was followed by selling. Please clarify. Thx

      1+
      • BIGBADWOLF July 3, 2018 6:48 pm at 6:48 pm

        Hi Randy I was referring to the third failure to break support at around 170 level on your QQQ chart before the third rejection from the resistance occurred. Mainly a bit concerned over the fact that the last rejection off the resistance came at a holiday.

        1+
  2. jamesp July 3, 2018 4:19 pm at 4:19 pm

    Not going to lie
    Yesterday stung really badly and I closed out all my shorts because of the strength of the move off lows. Then of course today happened forming up the bearish scenario

    2+
    • Koolmoto July 3, 2018 5:30 pm at 5:30 pm

      I thought about it too but was waiting for a close above the top of the break down candle (daily close above $174) to convince me. It appears to me we are still in a bearish continuation pattern. Today’s sell off was a welcome sight.

      1+
  3. michael225 July 3, 2018 4:21 pm at 4:21 pm

    Thanks Randy! Happy 4th to you guys. Great job as always and congratulations on the recent success of your site. Enjoy your vacation but don’t be gone too long… we get withdrawals without some good analysis videos. =)

    3+
    • rsotc July 3, 2018 4:48 pm at 4:48 pm

      Thx Michael. The cabin we’re staying in has crawl-speed internet & cell phone reception up here isn’t much better. However, I might try a shot at uploading a quick video after trading resumes on the 5th to see how it goes.

      1+
  4. brandk3 July 3, 2018 4:41 pm at 4:41 pm

    Randy keep up the great work. I am a fan. Also, please take some time off.

    3+
    • surerefund July 3, 2018 8:54 pm at 8:54 pm

      Please relax with your families and friends and get a break from your usual routines. After a successful vacation, you will be ready to take on the market again.

      2+

Leave A Comment