Hi Reid,
Good to see TMW weekly letter back!
Both the Nasdaq 100 and the Nasdaq composite closed down on the week again; these indices have only closed in the green twice all year. And, both breached the January lows intraday, thus setting a new low for the year.
However, both closed with a rally in the last 45 minutes. I think the rather moderate EOD rally into the close on Friday was probably due to shorts closing positions and booking profits going into the weekend.
That said, I agree that QQQQ will rally above $37 next week, but the middle of the BBs will prove difficult resistance (currently at $37.29)
stockcharts.com[w,a]daclyyay[dc][pd20,2!b20][vc60][iLg!Lp14,3,3]&pref=G
Note the last two candles on the $NDX:
stockcharts.com[w,a]daclyyay[dc][pb50!b200][vc60][iLg!Lp14,3,3]&pref=G
Unlike QQQQ, both the $NDX and the $COMPX closed above the 200 sma.
stockcharts.com[w,a]daclyyay[dc][pb50!b200][vc60][iLg!Lp14,3,3]&pref=G
Short-term market internals (volatilities and TICKs and TRINs) also indicate upside next week. Nasdaq and QQQQ volatilities are already dropping.
Volume patterns last week strongly indicate that next week we will see significant upside relief.
Despite the clear evidence of short-term reversal, the medium-term trend continues to be down, and once this short-term relief rally is exhausted, we will see more downside. I think this will likely begin late in the week, with a fairly good chance we will once again end next week down compared to last week. Downside targets remain the same as previously outlined. But it appears the fork analysis suggests a considerably lower potential reversal zone closer to $34 or even lower. I can't see QQQQ trading down that far, as I have posted previously. At the $35 level and below, there is solid support, and QQQQ will find a wall of buyers that will stop further decline, IMHO.
So, long is the place to be next week (at least the early and mid parts of next week), but you gotta be nimble... this market could turn on us quickly and viciously. Tighter than usual stops on long positions are essential, IMHO.
T |
