Hi Gersh,
Interesting, I hadn't noticed the contraction. The BBs are just starting to get very contracted. You can plot this on Stockcharts, as you probably know:
stockcharts.com[w,a]daclyyay[dc][pb50!d20,2][vc60][iLyb20,2.0]&pref=G
Today a reversal candle was formed at an area of relative resistance defined by the middle of the real body of Friday's volume-heavy bearish candlestick. QQQQ managed to close just above the 200 sma. Total volume was anemic everywhere, including QQQQ. But the distribution of the volume suggests buying pressure more than selling pressure.
One other thing to note about the above chart. I believe we are seeing sequential trading ranges developing. One range between roughly $37 and $38 began with the January lows, and was broken to the downside a few weeks ago, shortly after QQQQ was turned away from the declining 50 sma decisively.
Now we are in a new, lower trading channel that remains to be clearly defined, but probably will turn out to be roughly bounded by $36 and $37. If you extrapolate forward, I think you can see that the 50 sma will reach $37 (a region of chart resistance) in just a few days.
I think QQQQ will rally to that point ($37 give or take a dime), then get turned back sharply once again, and will head to sub-$36 levels.
So I am still long QQQQ, but wishing I were short because I think the current rally will be short and sweet.... if we make it to the 50 sma I'll get the hell out of Dodge, count my blessings...then flip short, of course!
T |
