Futures are poised to breakout of the current downtrend. After yesterday's close, the idea was to have a rejection overnight which did not happen. Today, we will be watching how the market reacts. It is a critical day because it will either prove to be a fakeout or breakout.
Although the QQQ is looking like a gap above the trend, we look at the big picture. On the daily chart, we currently have a larger uptrend that has been broken down. Similar idea with the daily SPY, we still continue to see the confirmation of the negative divergence. This has been building and going back for months. This forecasts a much bigger move to the downside. A 5% drop doesn't do this justice. The coming green days may likely just be a kickback to make it look bullish. We'll likely still drop into the end of the month.
One thing to note, is if they run up and try to make it a little bit higher, we look at the backtest of the bull trend line dating back to 2009.
Although the QQQ is looking like a gap above the trend, we look at the big picture. On the daily chart, we currently have a larger uptrend that has been broken down. Similar idea with the daily SPY, we still continue to see the confirmation of the negative divergence. This has been building and going back for months. This forecasts a much bigger move to the downside. A 5% drop doesn't do this justice. The coming green days may likely just be a kickback to make it look bullish. We'll likely still drop into the end of the month.
One thing to note, is if they run up and try to make it a little bit higher, we look at the backtest of the bull trend line dating back to 2009.