QQQ Update & Trade Set-up

When I put out market updates and information, my hope is, you'll develop the confidence in our tools, concepts and information to not just read an update, but to figure out how you can best apply the information to your personal style of trading.

Since writing the last update covering the USD/JPY, I have seen this develop in the NQ 1 min chart (NASDAQ 100 futures)...

 NQ 1 min positive intraday divegrence. We have been leaning toward this most of the afternoon .

The QQQ 1 min chart has a stronger 1 min positive divegrence that is leading as well.

This suggests to me that there's an increasing probability of a QQQ bounce, maybe a market wide bounce, but for now we are seeing the QQQ divergences.

Remember at the 2 min QQQ chart, there's no such positive, meaning it's pretty weak if it can't migrate to even a 2 min chart.

The 5 min NQ is telling us the same thing, despite the 1 min positive and perhaps USD/JPY to support it, they are all short term, weak divergences.

NQ 7 min is a weak chart and suggests further downside.

The stronger 30 min NQ chart is leading negative as you can see the entire cycle fro the 12/12 forecast.

And the 60 min NQ chart is very negative.

So looking at NQ charts alone, what is the highest probability resolution?

For additional confirmation as we have seen multiple time frames, lets include multiple assets. You saw the QQQ 2 min above not showing any such positive divergence so it's a positive divergence that can move the Q's, but a weak one with what we know so far.

 The 15 min QQQ chart has a SCREAMING leading negative divergence. If you want to know what kind of edge I look for in my positions, this is it, unambiguous, it takes no searching the chart to find, it jumps off the chart and I never ignore these signals.


So... What can I do with the information? Short term, QQQ probable strength, but not lasting.

Perhaps try to trade the QQQ long? I'd say absolutely not, there's so much data showing how weak the QQQ is, why would I trade AGAINST the probabilities?

How about yesterday's post of a trade I like, SQQQ Long the 3x short QQQ inverse ETF?

If the Q's bounce, then the price of SQQQ comes down and makes it cheaper to buy as well as lower risk.


SQQQ itself has strong charts as the linked post above shows, but here's an example...

This is the SQQQ 15 min chart, look at the size of that leading positive divegrence on a strong 15 min chart. Again, this is the kind of divergence that jumps off the chart and the kind I don't ignore.

So, if the Q's bounce and I'm interested in SQQQ long (3x short the QQQ), I have absolutely nothing to lose by waiting and seeing if there's a bounce in the Q's that allows me to buy SQQQ at a discount, being all of the long term and strong charts point to massive QQQ downside beyond a short term 1 min chart.

If the Q's don't bounce, nothing ventured, nothing lost.

This is using the market's short term price strength tactically to enter a longer term, strong strategic position. I'd be using the market's momentum against itself and creating a low risk, high probability position for myself or in other words, LET THE TRADE COME TO YOU ON YOUR TERMS RATHER THAN CHASING IT.

That's my take away and use of the information above.