Those very tricky time-frames are always an issue. Yet we can trade markets with different setups, even within other potential setups. Potential, because there can be good setups literally based upon another higher time-frame process setup. But we can use the original EA, like preliminary supply, to know there is virtually always a secondary rally (and often more) while we wait and watch what the preliminary area does. This is exactly what the 123 reaction after a BC is. Or the automatic rally after preliminary support, which then we watch as it sets up a potential spring. And we can do this on all time-frames, daytrade to position trade. We look for the sequence of events, and any of them can be traded, it’s just about do they setup. And remembering that in a strong uptrend, with a lot of accum, “tops” usually morph into reaccumulation. Yet again the time-frames, as the Russell has given several (at least 5) opportunities with intermediate tops within the secular bull. These have been shorting opportunities, I traded and wrote about some of these over the years, but if you don’t believe in the secular bull, and you don’t start covering into weakness, they would have not worked. The one(s) in 2014-15, that took 18 months to top, but it was a good one, down 30+%.
So now the QQQ we’ve been talking about the volatility and the volume, and watching things unfold, but there are springs, and yet there might be those who believe in a bigger top (distribution), so there’s that approach. The odds favor morphing into reaccumulation, like with BTC recently, “tops” morphing into reaccumulation, which I talked about that reaccumulation area in BTC a few days ago – give them plenty of room. Tops, even short-term ones, don’t top on bad news, they top on really good news, but it’s often the bad news which “causes” the break thru the secondary rally supports. The volume staying very high is helpful as a tool.
And we can look at EEM and FXI, to start judging for potential. I shorted and covered EEM a few weeks ago. If a bigger break occurs, and then I’ll look to short into the next rally. Tech stocks in Asia have also seen a lot of selling.
Gold got back to 1260 and bounced. In the comments section last week, I talked about how gold below 1260 could get a bit rough, but would then set up a higher quality area then. The jobs number is Friday, and another reaction in gold and another bounce in this area would be a setup for something like early July, the last time I bought gold.
Keep in mind the situation with the weakness in the QQQ, and judging, not pressing individual stock trades.
I’m doing a post about the setups in CUR yesterday. DPW had a nice secondary rally setup, but it looks like an overall top. Still watching for that ROKU setup. AVEO on a break below 2.50.