ProShares UltraPro QQQ ETF (TQQQ)

[TREND1]

QQQ Hits New High, but Failure Swing Looms
The Nasdaq 100 ETF (QQQ) hit a new high with a gap up on Wednesday, but fell back on Thursday. This three-day reversal captures the essence of an evening doji star and marks the second such reversal this month. QQQ is still in an uptrend and still leading, but two candlestick reversals in one month increase the odds of a correction. Keep in mind that QQQ is up some 46% since late March.

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A bearish failure swing is also taking shape in RSI. According to Welles Wilder, the bearish failure swing is independent of price action. Yes, a bearish divergence is also taking shape, but I do not use divergences for signals. The bearish failure swing forms when RSI moves above 70, pulls back below 70, bounces, fails to exceed 70 and then breaks its prior low. RSI has yet to break its prior low, but the failure swing is working and would be confirmed with a move below the mid June low.

BY ART HILL
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