QQQ Levels to Watch: 2 BEAR and 1 Bull Near Term Scenarios
Hope everyone is staying safe... Defeat the invisible enemy by giving it nothing to attack!
OK... on to what we all came here for...
Was March 2020 the bottom and now we are back on the bullish track...? In the words of Lee Corso, "Not so fast my friend". Lets take a look:
There are three scenarios brewing with the front end already in play for each.
As of 9pm EST, NQ/QQQ Futures are down roughly 1.6%. I expect this to hold if not get worse over night.
With the potential gap down, the most likely scenario is at some point tomorrow the price action for QQQ will test the 23 March trend line near $192.10. Bear in mind (pun intended), this is a weak trend with only two (2) touch points. There is a fair potential in the next 1-3 trading days that this weak trend is broken and we follow the yellow path of A (or a bounce, more later). $192.10 is my near tern target a short position profit and reassessment.
1. The yellow path of A suggest we may break the weak trend and aim for previous price support/resistance near $182.25. A break or gap down below the 23 March trend in the coming days would suggest QQQ will revisit $182.25. Whether it takes the direct path of the yellow A or back test the 23 March trend remains to be seen (thus the re-assessment)
2. The Green B path is the near term bullish path. Future suggest a gap down in the morning. There is a scenario where QQQ test the weak trend line from 23 March and gets a bounce. If this happens, look for a retest of the upper trend line of the rising wedge (Another bearish signal).
3. The Lavender C path takes the path of B but bounces off the upper channel with a split path to $182.25. One would be a gap below the trend line and retest of the lower trend of the rising wedge or the direct path straight to C.
RANGE BOUND LEVELS tTO WATCH:
North (top): .382 Retracement from recent bottom - $210
South (bottom): August 2015 Trend Line
OTHER LEVELS TO WATCH:
Blue Line (Resistance) = 4hr 200 Exponential Moving Average (I like to use the exponential average when volatility is high)
Caution:
A break, close and reopen above the .382 Retracement or below the August 2015 trend line on the daily chart could be the final indicator to whether we continue to move higher or further slide down to test the recent lows near $165.
CLOSING THOUGHTS:
- 2 Bear and 1 Bull near term path guide me to lean towards a bearish solution.
Last week, I watched a lot of CNBC to see what the so-call professionals were saying and many were suggesting the bottom was in and to buy.
Yet I subscribe to the teaching of Warren Buffet:
"... be fearful when others are greedy and be greedy when others are fearful". At this point in the charts (at least in the near terms), outside of dollar cost averaging, I believe a buyer here is being greedy.
OK... on to what we all came here for...
Was March 2020 the bottom and now we are back on the bullish track...? In the words of Lee Corso, "Not so fast my friend". Lets take a look:
There are three scenarios brewing with the front end already in play for each.
As of 9pm EST, NQ/QQQ Futures are down roughly 1.6%. I expect this to hold if not get worse over night.
With the potential gap down, the most likely scenario is at some point tomorrow the price action for QQQ will test the 23 March trend line near $192.10. Bear in mind (pun intended), this is a weak trend with only two (2) touch points. There is a fair potential in the next 1-3 trading days that this weak trend is broken and we follow the yellow path of A (or a bounce, more later). $192.10 is my near tern target a short position profit and reassessment.
1. The yellow path of A suggest we may break the weak trend and aim for previous price support/resistance near $182.25. A break or gap down below the 23 March trend in the coming days would suggest QQQ will revisit $182.25. Whether it takes the direct path of the yellow A or back test the 23 March trend remains to be seen (thus the re-assessment)
2. The Green B path is the near term bullish path. Future suggest a gap down in the morning. There is a scenario where QQQ test the weak trend line from 23 March and gets a bounce. If this happens, look for a retest of the upper trend line of the rising wedge (Another bearish signal).
3. The Lavender C path takes the path of B but bounces off the upper channel with a split path to $182.25. One would be a gap below the trend line and retest of the lower trend of the rising wedge or the direct path straight to C.
RANGE BOUND LEVELS tTO WATCH:
North (top): .382 Retracement from recent bottom - $210
South (bottom): August 2015 Trend Line
OTHER LEVELS TO WATCH:
Blue Line (Resistance) = 4hr 200 Exponential Moving Average (I like to use the exponential average when volatility is high)
Caution:
A break, close and reopen above the .382 Retracement or below the August 2015 trend line on the daily chart could be the final indicator to whether we continue to move higher or further slide down to test the recent lows near $165.
CLOSING THOUGHTS:
- 2 Bear and 1 Bull near term path guide me to lean towards a bearish solution.
Last week, I watched a lot of CNBC to see what the so-call professionals were saying and many were suggesting the bottom was in and to buy.
Yet I subscribe to the teaching of Warren Buffet:
"... be fearful when others are greedy and be greedy when others are fearful". At this point in the charts (at least in the near terms), outside of dollar cost averaging, I believe a buyer here is being greedy.
