QQQ Due for Brief Relief Rally to Test Critical Resistance
QQQ is barely hanging on to its 200 MA and bouncing off of the 90.34 fib level. The RSI indicates QQQ is extremely oversold in the short term. I believe it should have a relief rally to the 94.30 fib level. Watch for whether it breaks that level or bounces back down. That level should be critical for whether or not we enter a longer term bear market. Overall my expectation is slightly higher for the bullish outcome. I plan to continue buying either way since I'm picking individual stocks that have good value. A market bounce would let me hit profit targets quicker so I would prefer that.
In a previous post I stated this may be a good thing since the QQQ weekly was going into a bearish wedge formation and very overbought. The weekly chart still shows an intact uptrend in QQQ and now looks healthier. The underlying value of stocks within the index are somewhat frothy but not absurdly so. There are still plenty of good deals.
Also with the possibility of Fed tapering being delayed to fend off deflation the outlook is likely reasonably bullish. The recent rally in the dollar was actually quite healthy for the US economy and helped reduce the deficit significantly. Pumping out a little more fiat money wouldn't hurt too much in my opinion. I just hope Europe doesn't default on anything...
In a previous post I stated this may be a good thing since the QQQ weekly was going into a bearish wedge formation and very overbought. The weekly chart still shows an intact uptrend in QQQ and now looks healthier. The underlying value of stocks within the index are somewhat frothy but not absurdly so. There are still plenty of good deals.
Also with the possibility of Fed tapering being delayed to fend off deflation the outlook is likely reasonably bullish. The recent rally in the dollar was actually quite healthy for the US economy and helped reduce the deficit significantly. Pumping out a little more fiat money wouldn't hurt too much in my opinion. I just hope Europe doesn't default on anything...