QQQ and You

qqq9  QQQ and You

The $QQQ (above) has been in this five week long consolidation since its big December 31 pop. The ETF also followed through to the upside on January 1. I’ve been watching this closely, as a move above and out of the  the box with volume may indeed get this going higher. Of course everyone is waiting for it to fail around this level, as the consensus is that “we are overbought”. I lean cautious here too and think a pullback would be healthy.

If you stretch out the daily chart of the $QQQ, (below), you can see why some may be warning of a potential right shoulder of a “possible”head and shoulder” pattern.  A move above and out of the box would probably negate that bearish outcome.

qqq hs  QQQ and You

Now let’s get really confused. If you stretch the weekly chart of the $QQQ you can make the case for a pretty bull flag.  Watching the charts is a fun exercise, but it is no guarantee of an outcome that you may want, it’s simply a guide. Many head and shoulder patterns never validate, many never break the neckline.

qqq weekly  QQQ and You

Anticipating a top or a bottom can be disastrous, so the best thing to do is wait for the indicators to really turn in one direction before playing anything too long or too short.. If this does start to roll over, my play will be $SQQQ. However I still think pullbacks will be fairly shallow and buyable, barring any hidden mini disasters.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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  • Joe Donohue

    Joe was on Wall St, for twenty five years and his career took him to the retail, institutional and capital markets... More »

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