We've had a nice pop ever since I suggested buying QQQQ at 50 dma (41.38, now 41.45) and there might be a little more to come but keep in mind this is option expiration week and any attempt to get above 43 will be quickly hammered. That could change next week, especially if oil eases, as it will one day. So for tomorrow's trading action, I suggest shorting NQ/QQQQ on a hit near 43. That would equate to about NQ 1759.50, monthly R2 and a good place to swing short. As you can see on the attached NQ chart, clear support is shaping up above the January gap open at 1737.50. Furthermore, we have a key fib level at 1739.25. Below that, bulls need to hold 1733, confluence 5 and 10 day ema. The January gap close is at NQ 1778.50, a possibility but I am starting to think we will be done at 1759, which is also 50% of that old gap (1758.50, see chart). Since the gap was closed by QQQQ already, it might not need to be a target for NQ, but I always keep an eye on these type of divergences. For now, play with the bulls, but be ready to flip it in reverse. Any long play is now on borrowed time should yields hold above 5% and oil above 70.
This entry was posted
on Wednesday, April 19, 2006 at 3:46 PM.
