The Nasdaq (QQQ) Continues To Follow Through

The Nasdaq (QQQ) continued to follow through the last two days holding the pivot point we have been watching. We need the market to create a new high which I marked with a yellow line in the chart. We need a new high to ensure that the current bullish trend is still intact. If the market were to fail to create a new high then it would be at risk for a possible sell-off.

Nasdaq (QQQ) Breakout Underway

I'm now bullish on the Nasdaq (QQQ) after the breakout of the range. I have been waiting for the market to breakout or breakdown from the trading range. That move finally took place with Nasdaq breaking the high around $55.70.

I will view the next pullback as a buying opportunity for a swing trade. The pullback must stay above $52.50 that will create a higher low in the chart. A swing trade is a trade that lasts several days.

The blue arrow shows Nasdaq breaking above the 200 daily MA as well as breaking above the trading range of the last few weeks. I like the fact that the QQQ's have created a higher low with each pullback.

 The weekly chart shows how Nasdaq has held up during the last pullback near the $50 support area. I like how the market has held up in an area that was a prior resistance point for the market. Whenever a resistance point is broken, it often turns into a support area. If Nasdaq (QQQ) breaks above the $60 area and holds, I will look for further gains. I will look to move my long term portfolio back into the market at that point.

QQQ following through with our rally

The QQQ's is following through with the rally that we have been expecting. The QQQ were very quiet in the morning session rallying late in the day to close the day at it's high. I wouldn't celebrate the rally just yet. We have some major resistance that will be coming up in the $56 area so I would expect that to be the first test. I wouldn't be surprised to see the QQQ's pull back alittle here which could actually be a bullish sign if it could create a higher low.

We want the QQQ's to break above and hold that $56 area in order to get momentum to test the highs. If we hold above we could look to test the $59 area once again. I marked the $56 resistance area with a red arrow.

I would look to take alittle profits on any longs if we get another day or two of rallies without any pullback.

Find out more about this QQQ Daytrade.

QQQ's weak rally

The market pulled off a quiet rally today without much volatility. This week was one of the markets most volatile weeks in history which made it very difficult to get a read on the market. We got a small gap this morning that didn't get much follow through. I still think we could continue with this bounce that we are getting in the market but I wouldn't be surprised if we chopped around here while the market consolidates the extreme volatility we have been experiencing. I believe on the top side we could get near the $55 area which could serve as a strong resistance area going into an options expiration week.

The market still seems weak and I believe it's still to early to decide which direction the market wants to go to open swing trades. Daytrades are the best way to go for now. You want to stay nimble until the odds move back into your favor and you have a good feel on the market.

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Failure to hold a break on QQQ

The QQQ's has failed to hold on to highs after the break of the $53 area. This shows there is heavy selling pressure and it looks like the market could have a rough time recovering losses. I was looking for swing plays that could take advantage of a market bounce and couldn't find any good risk/reward trades. The market is just to volatile to take swing trades at this point so daytrades come in handy in staying nimble and bringing in profits. I posted a couple day trades on SODA and CREE earlier today that worked to perfect. This type of enviornment is where it pays to be an all around investor and trader taking advantage of the different waves of opportunity the market provides.

I believe if the market could break and hold above the $53.50 area in the QQQ's, we could see the market try to test the upper resistance near $56. Any failure and break below $50 in the QQQ's at this point is a very bearish sign which will bring alot of panicked sellers into the market since at this point. There are many stops sitting below the $50 area and a break of that area will change my bias to bearish.

I definitely have my shopping list out and looking for opportunities to take advantage of this move in my long term trades. This is a great time to watch those penny stocks and target those value plays.

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Is this the next round of selling?

The market had another strong day of selling but does this mean that there is more to come? I'm not convinced yet until we break the lows which on the QQQ's was $50. It's not uncommon for markets and stocks to retest lows after heavy rounds of selling. Retests aren't a sign of weakness but actually could be a sign of strength. Why is that? If the market or stock trys to break lower and fails then it shows that there is strong support in that area with alot of buyers. That actually could provide a great opportunity to add to a position with a tighter risk since your stop should be at the low of the closest pivot.

So far the QQQ's have failed to break above the last red bar and has failed to break the $50 low so we are still in a sideways range. Support and Resistance triggers are marked with arrows.

I still have an upside bias but we play the market waves so which ever way the market breaks is where we will position ourselves. If these lows break I believe we could see some pretty heavy selling but I would prefer to see a bounce first before entering any new shorts.

Right now the smart thing to do is look for plays to add to my long term portfolio. When markets get hit hard it's always a good idea to update the shopping list.

Learn more about my swing trading and core trading investment strategies at investanomics.com