Monday, December 20, 2010

False Breakout?

The probability of this recent move at 2 p.m. being a false breakout looks pretty high. False breakouts tend to move the other way (down) pretty quick when they fail ( meaning below the support trendline).

 DIA 3C still negatively divergent and not confirming the move.

 Same with the QQQQ
 Here's the Q's resistance level taken out by the move up, a move below that will create a false breakout and most likely a swift move down. Note the volume did not expand on te breakout.
 SPY negative divergence
SPY false breakout? Both volume and 3C tend to lean that way. A break below (maybe you should set some alerts at the support level) could be a decent quick short trade using a leveraged ETF.

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