AI
Saturday, December 23, 2006 3:58:20 PM
QQQQ - Friday's 5-Minute Chart (12/22/06)...
The QQQQ closed below Support at its 50-Day Moving Average on Friday.
Just as a close above the 50-Day Moving Average constituted an intermediate-term "Buy" Signal last August, Friday's close below the 50-Day Moving Average may now constitute an intermediate-term "Sell" Signal (an intermediate-term signal can last anywhere from weeks to months, as did the "Buy" Signal of last August).
Friday's 5-Minute Chart (below) shows the QQQQ bouncing sharply from its initial visit to Gathering Support only to find Resistance at the violated 50-Day Moving Average and then bouncing again, more modestly this time, in the afternoon.
On Tuesday, with failed Support at the 50-Day Moving Average ($43.33), all eyes will be on potential Support in the vicinity of $43.00.
The $43.00 mark is important because it represents a combination of the Spring Peak (see the Weekly Chart) and the middle of the 10-Week Trading Band labeled 10wtb50 on the spreadsheet)...
1) In chart work, former peaks (such as the Spring Peak at $43.00) often serve as Support on the way back down.
2) The middle of a 10-Week Trading Band ($43.00) represents a neutral price for the previous 10 week period and also often serves as Support on the way back down.
If, therefore, Support at $43.00 fails, it would be viewed as evidence, in addition to failed Support at the 50-Day Moving Average, that the intermediate term picture for the QQQQ is weakening.
The QQQQ closed below Support at its 50-Day Moving Average on Friday.
Just as a close above the 50-Day Moving Average constituted an intermediate-term "Buy" Signal last August, Friday's close below the 50-Day Moving Average may now constitute an intermediate-term "Sell" Signal (an intermediate-term signal can last anywhere from weeks to months, as did the "Buy" Signal of last August).
Friday's 5-Minute Chart (below) shows the QQQQ bouncing sharply from its initial visit to Gathering Support only to find Resistance at the violated 50-Day Moving Average and then bouncing again, more modestly this time, in the afternoon.
On Tuesday, with failed Support at the 50-Day Moving Average ($43.33), all eyes will be on potential Support in the vicinity of $43.00.
The $43.00 mark is important because it represents a combination of the Spring Peak (see the Weekly Chart) and the middle of the 10-Week Trading Band labeled 10wtb50 on the spreadsheet)...
1) In chart work, former peaks (such as the Spring Peak at $43.00) often serve as Support on the way back down.
2) The middle of a 10-Week Trading Band ($43.00) represents a neutral price for the previous 10 week period and also often serves as Support on the way back down.
If, therefore, Support at $43.00 fails, it would be viewed as evidence, in addition to failed Support at the 50-Day Moving Average, that the intermediate term picture for the QQQQ is weakening.
Buy at Support
Sell at Resistance
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