I have found that about 40% of new QQQ short term down-trends end within 5 days. So I buy a little SQQQ on Day 1 and increase the position slowly. SQQQ has now closed above its daily 8exp and 21exp averages.
All Posts
Blog Post: Day 29 of $QQQ short term up-trend; 83 US new highs and 132 lows; QQQ is right on support–Friday’s close should provide an idea where Mr. Market wants to go, see chart
QQQ is right on its 30 day average(red solid line) and there have been two black dots, indicating an oversold bounce. The 10.4 daily stochastic is also below 20, the level where this index often bounces. Note also the higher volume on Thursday’s advance. Friday’s close should give me an indication whether the QQQ short term up-trend remains intact. Then it will be time for me to buy TQQQ or SQQQ. The key is to remain agnostic and to ride the market in the direction it wants to go.
Blog Post; 51 US new highs and 114 new lows; Indexes weakening and GMI falls to 3 (of 6); See rising short term rates indicator chart in a daily RWB up-trend, and see how I use MACD histograms to monitor turns in $QQQ, $SPY and $TSLA.
My QQQ short term trend indicator could turn down with a couple of more days of weakness in QQQ. The GMI could also flash RED. I am 95% cash in my trading account. With earnings season over, there is very little good news to propel stocks higher. There is often a post earnings season lull in the markets. And interest rates are rising. Look at this short term interest rate indicator. All of the shorter averages (red) are rising above the longer term averages (blue) in a daily RWB up-trend.
MACD histograms are an interesting indicator I use to identify a likely change in the short term trend. They often move up or down before the change in trend is apparent in the prices. You can more easily see the histograms gradually gaining or losing strength. Check themselves out for yourself. The daily MACD histograms of QQQ have turned red, a sign of a developing down-trend. Note how they declined even when prices bounced up a few days ago. I will watch for these histograms to start rising and to turn black again.
Here is SPY. Note how they rose at the recent bottom before they turned black.
And TSLA is about to turn red. Note how the red bars started to rise in early January before price got going, called positive or bullish divergence. (Thanks to my stock buddy, Judy, for teaching me how to interpret the MACD histogram indicator years ago.)
