It was a pivotal week even before Thursday and Friday. On Tuesday night, we sent this to our subs about the NYSE:IWM:
“Most important chart for us right now: Bullish is when/if trend-line breaks; bearish is if weekly 50sma, which has been holding for 4 weeks, fails. Whatever direction it goes, we think will direct the whole market.”
And two days later:
IWM (2)
This was the first test of the weekly 50sma on the NASDAQ:QQQ and usually first tests hold, at least for a bounce. Not this time.
QQQ
So what’s next? Next magnet is the 100 zone on the QQQ, which is horizontal support from Dec-Jan, the monthly 20sma, and the test of upper trend-line channel. Big area.
What’s pretty amazing is how cool and collected this sell-off is — what do you see here? A simple two day trend down under the 15 min/9EMA. Makes us feel somewhat stupid for trying to go against it on Friday.
Hindsight is 20/20 and we wish we had paid more attention to this 3 weeks ago –a very clear NASDAQ:AAPL break-down.
However you want to analyze it, the technical damage is massive on the short-term (daily) and intermediate (weekly) time frames.
Longer-term charts still intact — but that’s not really as much for traders rather than for investors. We’d have to break 90 on the QQQ for that to break.
Support is meaningless when bear sentiment rules– we don’t think we’re there right now. Yet anyway. Let’s see what happens on QQQ 100 and then re-assess. See you Monday in the virtual trading turret
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