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Strategies & Market Trends : Ask Vendit Off-Topic Questions

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To: Walkingshadow who wrote (6037)	3/6/2005 10:25:06 AM
From: Vendit™	Read Replies (4) of 8752

QQQQ Analysis moving into week of March 06, 2005 Last Wednesday the QQQQ proved yet again that 38.00 is solid upper resistance as the index hit that mark and quickly fell back again to test lower levels of support on Thursday. The past five-day chart: themarketwind.com The six-month daily chart shows some interesting technical developments that are worth noting. themarketwind.com The wedge is the edge. The most striking thing at first glance is the wedge that has formed around the current trading range. The wedge shows a narrowing area of consolidation as well as a build up of pressure so we can expect an explosive move up or down during the coming week as the QQQQ makes a decisive move out of the wedge. The direction of the move will be determined by the position of the oscillators on Tuesday / Wednesday. The ever narrowing wedge is the edge of the point of release as pressure to move out of that wedged zone will become too great as the sessions move towards the point of the wedge. Now let’s focus on the medium term stochastic oscillator. Its trend has a definite bend towards a negative bias. That negative bend hints that the QQQQ’s break out of the wedge may be down. Next we look at the spinning top candlestick that formed on Friday. A spinning top tells us that Bulls and Bears were about equal in number for the day. That means we have neutrality or a directionless session. It simply means that both Bulls and Bears are confused and do not know what to do. So what is in store for the coming week? Looking at a very short time-frame in linear regression and comparing that with William’s %R which is pointing up I think that it is possible on Monday to see a surge up to just under 38.00 followed by an intra-day reversal late Monday or early Tuesday. 139.142.147.218 More likely scenario is the longer period look at linear regression shows that we should not try and pick pennies at this point because the past 90-day history shows us that once the trading range reaches the upper L/R line it almost immediately falls back to lower levels. Friday’s spinning top intersects with the upper L/R line as you can see in the chart below. 139.142.147.218 An intra-day 30-minute chart show that stochastic is setup in the sell zone and confirms what the 90 day L/R chart is telling us. 139.142.147.22 The bottom line is that we will likely see a move up at open in the morning followed by a sell-off that will last for at least two sessions. 36.66 is extreme lower support and 38.01 is extreme upper resistance. JMO Reid

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