Tuesday, August 30, 2011

Don't get complacent

The leader of the bounce, the $QQQ is now in difficult, uphill waters.  No chart illustrates this better than the weekly:

We bounced on the 100SMA and today stalled into the 50SMA.  Very nice move but we imagine things will slow down now and more range-bound strategies will again come to the fore.
To further the argument note the triple resistance just above us on the daily chart — we think the 55.7-56.4 zone will offer excellent resistance shorts for our type of active trading.
Any basing at this upper range would further strengthen the bull argument.  However, a further move up in a quick manner into major resistance would likely fail.