[madtrader]
Thu Jan 17, 3:25pm PST QQQ
MSFT and IBM earnings numbers aren't really surprising. The only sin these two had was to move up ahead of their numbers. So we get the sell on news in afterhours. After going through the intraday charts once more. In hindsight, last Wednesday's gap up then the big reversal was indeed enough of a warning for a substantial drop. When looking at the hourly charts, one can see the negative divergence in RSI and Momentum. The interesting part is, exactly a week later, what many may consider a nasty Wednesday as well the QQQ had a positive divergence in RSI and momentum. Unless the Street changes their mind overnight, one can expect a possible gap down openning tomorrow. For the aggressive types, it is an openning worth buying into. Again, due to the positive divergence we have seen. A bounce back to a week ago Wednesday's closing lows will be the first retest of the "break down". none.
[madtrader]
Thu Jan 17, 2:02pm PST TV
Momentum
This battle of opinions is far from over. But from the looks of things, TV is ready to run again. I first mentioned this name back in early December, suggesting it as a good long candidate. By end of December, a reader and Rumordude thought the chart as a short. I am assuming it had to do with the run the stock has made already. I have said this before, and I will say it again. The mere fact a stock had a big run isn't a good reason to go short on it. It is understandable that our natural inclination is to go short in such a situation. I use to view stock the same way, thus missing out on some truely monster gainers. Obviously, there are a lot of stocks that did get killed after a big move. But one need to distinguish the nature of the breakout move. In the case of TV, the move was a long term trend reversal, and momentum was never negative during the last congestion period. If one wants to go short after a big move, I usually look for momentum break down. For example, CHKP and MCAF are two good candidates here. Both names made massive moves from their September lows, and despite the drop in the past week. They are still up a big chunk. The drop in the past few days have done enough damage to render their momentum negative right now. I would imagine there is much more downside to come. none.
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[madtrader]
Thu Jan 17, 12:44pm PST QQQ
As I suggested earlier, QQQ indeed followed MSFT's footsteps and filled the gap from yesterday. But we are back to near big round number 40 again. As it is the case with index expiration, I wouldn't be surprised to see we get stuck right below 40. Although NDX itself is above 1600 already. I am noticing some laggards behaving better. Names like QCOM, ORCL, etc. But I think this is all we are going to get for today though. MSFT is doing earnings in aftermarket, I don't think we will get too many willing overnight holders. none. |
