By: Jeff Cooper
Hit and Run Trading Morning Report - December 8, 2023
Analyzing the Q’s
Q’s are the leader.
They bottomed on a Time/Price square-out in late October.
This is because the all-time closing high was 404 on November 19th 2021.
This was right into our turning point date of November 21/22.
404 is 180 degrees straight across and opposite October 26th.
Our big low prior to this rally was October 27th.
Precisely 2 years after the QQQ all-time high it struck a closing high on November 20th which
Remains the closing high for the move so far.
Following a breakout on November 7th, the Q’s ran up to November 20th where they’ve traced out a Line Formation.
Is the Line Formation a high level consolidation or is it distribution prior to a correction.
It must be said that we’ve seen fireworks in many individual stocks comprising the QQQ during this side-ways stint.
As long as the overall market and indices at large are not getting hit, money managers will play and chase.
On November 29th the Q’s left a Gilligan sell signal as well as a Soup Nazi sell signal.
Below we zoom into the Combo sell signal.
A Gilligan sell is a gap up to a new 60 day high with a close at near session lows.
A Soup Nazi is a new 20 day high that reverses stabbing back down thru the high of at least 4 days ago within the 20 day lookback.
The sell signals produced a pullback to the 20 day moving average.
Notably, the QQQ 3 Day Chart traced out a “stealth” turndown of its 3 Day Chart on November 28,
The day prior to the intraday high for the move…the Combo sell signals of the Gilligan and Soup Nazi on November 29th.
While Wednesday reversed again from a gap up open, once again the 20 day moving average supported the Q’s.
In sum, the 3 Day Chart turned back up yesterday ---right into this morning’s widely-watched jobs numbers.
Things are going to get interesting.
Either this turn up in the 3 Day Chart is going to define a high soon in terms of time and price…or the Line Formation is coming to an end with an attack of all-time highs on the table.
Pulling back the lens to check the weeklies shows 3 drives to a low in late October followed by a Weekly Rule of 4 Breakout.
Immediately following the breakout the Q’s turned their 3 Week Chart up .
The next week started the aforesaid Line Formation.
The daily Combo signals perpetuated a turn down in the Weekly Swing Chart.
Bullishly the Q’s rallied off that turndown.
The upside pivot now will be the behavior following a turn back up of the weeklies.
I doubt that is today’s business.
But it could happen next week on trade above whatever high is struck this week.