SQQQ Example-Don't Get Lost in the Lines

Don't get lost in the lines, kind of like seeing the forest through the trees. Sometimes we get so fancy trying to nail something exactly that we miss our chance, that's something each person has to examine individually and decide whether you have good reason (that might depend on your portfolio positioning, for someone who already has good exposure, you may have higher standards for any add to positions) or whether you are more interested in being right (hitting the exact top) than making money, believe me that conflict is real for many people to some degree.

Looking at SQQQ-the QQQ 3x leveraged short or bear ETF (and like the SPY, I'm just using this as an example-I actually like SRTY here a lot), here's what we have and I'd say this is a pretty decent area to own some SQQQ.

 This is a pretty important longer term chart, like trend 2, the last negative divergence is the start of trend #1, since we have a decent leading positive divergence on a 30 min chart, it will look sharper and larger on shorter timeframes, but the longer timeframe chart is the stronger signal.

 The 15 min chart turning negative right before trend #1 pops and a leading positive divergence here too, most of it recent, remember the market needed to get above the 1/4 highs before we really started to see signals.

 Like I said above, a 5 min chart like this will appear to have a stronger positive divergence, it's more defined, it looks stronger, but there's no comparison between  5 min chart and a 30 min chart, the 30 min is showing us a much stronger chart (it's not disagreeing with anything on the 5 min, it's just the further out the signal goes, the stronger it is).


 Now coming back around at this from the short end on the intraday 1 min chart, this looks very strong, it has gone from strong relative divergences to a strong leading divergence which is commonly the way these divergences transition.

The 2 min chart is strong as well, not quite as strong. Big picture I have no problem owning SQQQ right here. Smaller picture or what I call tactical, there's a gap, we have seen the last  several days see afternoon market rallies ( a decline here) as the VIX is manipulated, but we have to weigh that against a gut feeling that I've had since we first predicted trend #1 and before it launched and that is, the market turns very fast, it doesn't give us the usual "process" of a reversal, but more of an event which is not common, but that's my gut so you have to weigh those and decide, but I'd want some exposure by now, actually personally I'd like to be about 75% complete with the short positions I intend to have in place or have been in the process of phasing in to.

I'll continue to feed you as much information as I can so the decision is easier, but a pullback in SQQQ would be a no-brainer to me, even right here I think it looks like a great position.