AI
Thursday, September 21, 2006 9:02:33 PM
Nightly QQQQ Observations for Subscribers...
The QQQQ printed a new high for the Summer Rally on Thursday when it rose in early trade to $40.67.
Thursday's 5-Minute Chart shows that the QQQQ honored its "Cup & Handle" Pattern with a continuation of Wednesday's rally; that the continued rally fell 7 cents shy of Thursday's area of "Gathering Resistance" between $40.74 and $40.82; and that a subsequent pull back dropped the QQQQ to Thursday's area of "Gathering Support" from which the QQQQ bounced a bit into the close:
For Friday, traders are wondering if Thursday's pullback from its early morning peak is the beginning of the larger "October Low" pull back. A violation of Friday's area of "Gathering Support" would increase the odds that it is, indeed, the beginning.
The QQQQ remains at or near an "overbought" condition in the short term with Negative Divergences displayed by the CCI and MACD Indicators that are attached to the Daily Chart. In addition, the QQQQ is still operating in a weak seasonal time frame. This combination suggests that a customary pull back into an October low is drawing near.
A "Negative Divergence" occurs when a rising price is accompanied by a falling CCI or MACD Histogram. The Daily Chart shows that a "Negative Divergence" in both the CCI and the MACD Histogram has been developing since mid-August.
The CCI will deliver a "Sell" Signal when it falls below the +100 Line, which it appears ready to do.
The MACD Indicator will deliver a "Sell" Signal when its thick black line crosses below the thin red line.
Interpreting the ADX Indicator (Daily Chart):
The thick black ADX Line continued to rise on Thursday. A rising ADX Line suggests that a trend is in force. Since the thin green line (buying pressure) is above the thin red line (selling pressure), the trend is up.
It must be noted, however, that when the thick black ADX Line of a Daily Chart reaches 40 and higher, it suggests an "overbought" condition (in the short-term). The ADX Line closed at 39.03 on Thursday.
The QQQQ printed a new high for the Summer Rally on Thursday when it rose in early trade to $40.67.
Thursday's 5-Minute Chart shows that the QQQQ honored its "Cup & Handle" Pattern with a continuation of Wednesday's rally; that the continued rally fell 7 cents shy of Thursday's area of "Gathering Resistance" between $40.74 and $40.82; and that a subsequent pull back dropped the QQQQ to Thursday's area of "Gathering Support" from which the QQQQ bounced a bit into the close:
For Friday, traders are wondering if Thursday's pullback from its early morning peak is the beginning of the larger "October Low" pull back. A violation of Friday's area of "Gathering Support" would increase the odds that it is, indeed, the beginning.
The QQQQ remains at or near an "overbought" condition in the short term with Negative Divergences displayed by the CCI and MACD Indicators that are attached to the Daily Chart. In addition, the QQQQ is still operating in a weak seasonal time frame. This combination suggests that a customary pull back into an October low is drawing near.
A "Negative Divergence" occurs when a rising price is accompanied by a falling CCI or MACD Histogram. The Daily Chart shows that a "Negative Divergence" in both the CCI and the MACD Histogram has been developing since mid-August.
The CCI will deliver a "Sell" Signal when it falls below the +100 Line, which it appears ready to do.
The MACD Indicator will deliver a "Sell" Signal when its thick black line crosses below the thin red line.
Interpreting the ADX Indicator (Daily Chart):
The thick black ADX Line continued to rise on Thursday. A rising ADX Line suggests that a trend is in force. Since the thin green line (buying pressure) is above the thin red line (selling pressure), the trend is up.
It must be noted, however, that when the thick black ADX Line of a Daily Chart reaches 40 and higher, it suggests an "overbought" condition (in the short-term). The ADX Line closed at 39.03 on Thursday.
Buy at Support
Sell at Resistance
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