Here's another historical similarity from the recent past in QQQQ.
Back in late February/early March of this year, the indexes dropped sharply, losing 7.2% from the peak on Feb. 22 ($45.42) to the bottom 7 session later, on March 5 ($42.15). In the process, there was sharply increased intraday volatility, a very high peak in the put/call, and a series of candles amidst a strong surge of volume in an area of congestion that turned out to be the bottom. From there, the index rallied over 19% to the highs of July 19.
Now I think there are parallels that should not be ignored. Again we have a sudden downturn with sharply increased volatility that is associated with high volume, and spikes in fear and bearishness evidenced by the put/call.
Might we retest the previous lows from about 5 days ago? Possibly.
I posted before that I did not think the previous highs from July would get taken out. However, that possibility is less remote now, IMHO. What seems clear to me is that this market is coiling for a significant move upwards. At this point, it is getting difficult to predict how far that might go.
When will that start? Possibly tomorrow, but we could easily retest the lows, as I said above. That retest could be simply intraday, or we could get another close at the previous lows. So I cannot say with any degree of confidence when the market will finally move up, just that this is imminent and could begin as early as tomorrow, or as late as several sessions from now.
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