good analysis...and i tend to agree with most everything you said...
the one thing i would point out is regarding divergence...there is potential negative divergence developing between price and MACD Histogram. It has not been confirmed yet however.
I am also uncomformtable going long here for various reasons, including the BB resistance you mentioned. Also, breadth was excessive on friday and may indicate, in the ST (1 to 3 days) limited upside and possible a retrace to relieve these conditions.
that said, Some interesting options activity that looks bullish for mid to late october...nearly 140K volume at the QQQ 36 puts. if this tranlates into the Open Interest on monday it would lead to one of the more lop-sided call vs put OI i have seen this year. currently the 34, 35 and 36 puts darf the calls at those strikes.
that implies 35 to 36 as support on the QQQ for october expiration. It also implies big money/institutions may be continuing to hedge new long positions with these puts.
the market may be over extended a bit here..however, i don't think we are in danger of a major breakdown. looking to buy the dips mid to late next week.
