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Strategies & Market Trends : Ask Vendit Off-Topic Questions -- Ignore unavailable to you. Want to Upgrade?

To: DOUG H who wrote (5762)	3/3/2005 3:57:12 AM
From: Walkingshadow	Respond to of 8752

<< Personally, I don't think we'll see $36. >> Where do you think QQQQ is headed, and why? Note that QQQQ has failed at the 50 sma convincingly (at the beginning of the year), then unsuccessfully tested that resistance twice, the second time being today: stockcharts.com[w,a]daclyyay[dc][pb50!b200][vc60][iLg!Lp14,3,3]&pref=G Notice also the acceleration in volume as QQQQ failed at the 50 sma. stockcharts.com[w,a]daclyyay[dc][pd20,2!b200][vc60][iLg!Lyb20,2.0]&pref=G Now look at the BBs. QQQQ found support at the middle of the BBs today. But see now contracted they are? And see how that contraction is getting worse because the lower rail is rising? The width of the BBs is now 1.3, and that is the second lowest reading in the last 3 years. It is useful to examine what happens when the BBs become so acutely contracted: stockcharts.com[w,a]daclyyay[df][pb50!b200][vc60][iLg!Lyb20,2.0]&pref=G It is hard to see on the above chart, but if you adjust the time frame I think you will see that the more contracted the BBs, the greater the tendency for a rather explosive expansion of the BBs by QQQQ pushing hard along one of the rails. The easiest, quickest, and most likely way QQQQ can resolve the current contraction is to push against the lower rail. Pushing against the upper rail would require a very strong rally by QQQQ to about $39.00 or more, and that seems extremely unlikely given the tremendous overhead resistance that has repeatedly turned QQQQ back. If QQQQ pushes open the lower rail, that should easily take QQQQ to a test of the 200 sma, currently at $36.42. But that will only partly open the BBs, and that is one reason I think the 200 sma will be breached soon. Today's candle is bearish. Oil is hitting all time highs above $53. All short-term market internals (TICKs, volatilities, and TRINs) clearly indicate downside here tomorrow. Volume patterns also indicate downside price movement is most likely here. But the index futures are currently trading flat or a bit in the green. Tomorrow before the open we have Initial Claims and Q4 Productivity reports, both of which the market will be very interested in, so these could provide a catalyst if they come in different from consensus. T