The day after Labor day is usually bullish and the crowd will chase it. The market has had an interesting pattern the past months of doing the exact opposite calendar-wise as last year. Will it be the same for September?
QQQQ has put support building at the 39 strike and call resistance at 40. NQ 50% 2006 is 1620.50, weekly R2 is 1622.50 and monthly R1 is 1622.50. That puts a lot of confluence in the 39.50 area for QQQQ where I expect this rally to find real resistance. If bulls can push above that, they will get to the 200 dma at 40.17. QQQQ is building a bearish wedge on this ascent accompanied by a slight bearish divergence on RSI and a MACD historigram pointing to a cross soon. NQ's chart has more of a triangle set up which is bullish. However, the media is starting to feel all cozy about the rally and that always puts me on guard. I called for an up August and played it, but I am far more cautious this month. That doesn't mean I expect a complete breakdown, that is not in the cards at this point, but we should get a pause soon.
There is some storm development in the Atlantic (tropical depression 6) which could bring us a hurricane by next week. Watch 68.60 on the downside and 71.30 above. Pivot is 69.625. The daily is still oversold and oil bulls can get dangerous once again, but they will first have to get out of the bear flag pattern exhibited since mid-August. A break above 71.50 would do the job. Unlikely for now.
This entry was posted
on Sunday, September 03, 2006 at 3:16 PM.
