QQQQ has a Non Event Day

qqqq20090729 Yesterday I was talking about how I noticed a confirmation sell signal on the QQQQ’s based on price and volume.  But today we really don’t seem to have confirmation either way. Volume was slightly higher on the Q’s but as far as price goes we did not test either the high or low of yesterday so we really don’t have much new information to go on.  Today is considered an ‘inside day’ since we stayed within the low and high of yesterday.  Tomorrow, if we again stay within the low and high of today, then that will be a ‘double inside day’ and would be a sign that a big move is coming.  Confused yet?

But seriously, double inside days can lead to big price moves.  They problem is they do not give a directional indication, just a general signal that a big move may be coming.  But since we don’t have a double inside day yet there is nothing to go on.

The market in general seems very reluctant to give any price back despite my signal for short term bearishness.  Perhaps it is not surprise since we are really getting close to super low volume summer doldrums season coming up here in August.  I suspect that if we do get a pullback in the next week or two, that it may be really quite a lame one.

By the way, price pulling back to 37.28 on the QQQQ’s would be about as normal price action as you can expect because it would be saying to me that we are just pulling back to the breakout area.

If I am wrong and the Q’s breakout north from this current congestion, then we may begin to see a really wild market to the upside.  I don’t expect that will happen at this time but as usual the market will let us know when the time is right.

What Would be the Most Deviant Outcome?

The most deviant outcome I can think of right now would be a an intra day breakout move above recent resistance that looks like a real breakout only to do a full retracement intra day and close near the lows.  That would blow out a lot of shorts and trap a ton of longs.. Seems like the perfect scenario on a slow volume low volume end of week before August.

Lets hope the rest of this week gives some better clues.

Posted in ETFS, Index Trading, Market Timing

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