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Showing posts with label QQQ. Show all posts
Showing posts with label QQQ. Show all posts

Saturday, September 28, 2013

Elliott Wave Analysis of QQQ

The recent price action we have seen over the past few days suggests it could be a triangle

Observant traders will have noticed the NDX and R2K have been the strongest, whilst the DOW and the SPX have been the weakness markets.

I suspect we still need a "thrust for this idea, (basically the same as the NQ/NDX) for wave [v], that would complex a 5 wave advance from the lows made in Aug 2013.

Once a 5 wave move is in place we should see it setup for a reversal, as Elliott Wave suggests once a 5 wave move is complete a correction at least will be seen.

Ideally we see a RSI divergence as well if we see a new price high.

Sunday, August 18, 2013

Market Report: A Good Start But More Needed

In my article 2 weeks ago, I was looking for a top in the US stock markets. Since that article we have a seen a decent reversal and one that potentially has confirmed a peak is in place, although technically speaking we don't yet have a 5 wave decline in place from the all time highs, but the potential for such an important clue (important to Elliotticians) is serious enough to consider the US markets could well have put in an important peak.


We went into the week after that last article with a potential setup for a reversal, although I did not post this chart in that article, it was one of the clues I mentioned that suggested a peak was close by.

Dow Jones Chart
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This chart was on Fridays close being the 2nd of August. The DOW made an all time high, if you remember back 2 weeks ago, the world was all giddy with delight about the DOW making record highs.

However I was not impressed, in fact I was more bearish than I have been of late, seeing such a pattern suggested we needed to be looking for a reversal, as I spoke about in that article 2 weeks ago.

I was working a pattern Elliotticians call an ending diagonal, and with the new spike high we had enough price action to consider a potential top in place and that set the tone for a reversal on Monday, some members went into the weekend short, although we never had any confirmation of a reversal signal until it dropped under our key support zone we was watching, but based on the larger pattern as well as this short term chart, it made sense to be looking for a top, just as most were celebrating the DOW making a new all time high.

Kind of ironic, the majority of the trading community bullish and we were mega bearish, but I find my best ideas come from fading the crowd, especially when I see a set up that suggests a reversal, I have done that at tops and bottoms many times over the years.

The setup on the DOW was too good of a setup not to recommend to members to look at ways to get short the US markets.

Fast forward and that chart looks like this.

Dow Jones Chart 2
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As I wrote earlier, we don't yet have a 5 wave advance in place, but the potential for one is there, I suspect a smaller wave [iii] is close to ending, so a small bounce in wave [iv] to around 15200 could be seen Monday/Tuesday before heading lower in wave [v], that would then complete a 5 wave decline from the all time highs.

I am working 2 ideas on the daily time frame, and depending on the reaction around 14000-14500 will suggest if the market needs to come back and retest the all time highs and print a move to 15700, or the top is in and we just witnessed a major high in place.

However I am not looking that far ahead as I still need to see a small 5 wave decline from the all time highs to have some confidence of a peak in place.

Should the market decide to adopt a different script, we will of course have to adjust our ideas, but until the market negates the ideas I will stick with what is working.

I use Elliott Wave to look for ideas to help members make $$$, we trade 1st count 2nd, we are more interested in making $$$ not looking for the "hero" call.


We went into the week looking for a peak and a breakdown in the NDX although the QQQs had started to show more strength than the other markets, I noticed the DOW was the weaker market and the SPX was not much better, but the NDX was still firm, which was causing me some issues, and at one stage I was considering the DOW and SPX potentially making a new all time highs, however like all good set ups, things eventually cleared us for us, and the NDX showed its hand.

NDX/QQQ Chart 1
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I posted this idea for members in the week, to non Elliotticians it probably don't mean a lot, but to those of us that study Elliott Wave it was a massive clue for us, and one that finally had us looking for a peak.

As the NDX made a new yearly high and multi-year high, the media was again celebrating this fact, but we on the other hand were looking at something totally different, we were getting bearish just as most were bullish.

The pattern is a triangle, and I was looking for a "thrust higher", once that "thrust" was in place, I was confident we would see a reversal. It could not have worked out better.

NDX/QQQ Chart 2
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With the SPX and DOW failing to make the new highs, it set the stage for a reversal in all the US Stock markets.

Again if the NDX/QQQs have put in an important high, we need to see a 5 wave decline, it's not completed a 5 wave decline yet, but the potential like the SPX and DOW is enough to take it seriously if we do see more downside.

The weekly chart can suggest something really bearish has just finished, although that is the furthest thing from my mind at the moment. I am more interested in trying to confirm a 5 wave decline in the US markets.


SPY Chart 1
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I posted this chart to my Stock Twits account, so it was a freebie for those that follow me, and those that took notice could have traded an nice 30-40 point move on the SPX, even 20 or 30 points is a good move and good $$ if you trade the right set up.

We knew where the idea was wrong and a 3 wave bounce would have offered a setup to sell, with risk defined, there was no second guessing, we had a clear guideline of where the idea was wrong.

Many members made in excess of 25 ES points, at $50 a point that's $1250 a contract, even if you traded puts as some members did, I am sure the gains were more than the monthly fee of $20. Probably even more than the yearly fee.

If things have just got started and my preferred daily idea works out the way I suspect, we can see 1500 on the SPX in no time at all, that's a few points to those that are interested in making $$$.

SPY Chart 2
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The chart of the SPY looks similar to the DOW, so we still need to see a 5 wave decline, but a small bounce for wave [iv], then a new low, will complete a 5 wave move from the all time highs and potentially suggest an important peak is in place.

I will leave it there for this week.

Until next time,

Have a profitable week ahead.