Great Trades

Wednesday, April 22, 2009

Why we shorted the Nasdaq 100/QQQQ

This chart shows why our trading model shorted the Nasdaq 100/QQQQ today near the highs today.



While the other indices remained well off their highs of last week, the Nasdaq 100 was retesting its highs, with strong resistance keeping it from breaking out. One of the best technical sell indicators is a failed buy signal. This 15-minute chart of QQQQ shows the clear bullish cup & handle pattern that failed to break out. This market has been extremely resilient, but normally this setup at the highs would signal more downside ahead.

posted by GreatTrades  # 4:39 PM

Comments:

Can the cup and handle action still be in play in a higher time frame chart?

# posted by  Jason : 10:57 PM

 

This cup and handle pattern is no longer valid in any time frame. The bottom of the handle was broken significantly. A breakout to new highs would still be bullish, but it wouldn't be this cup & handle pattern.

# posted by  GreatTrades : 12:49 AM

 

Thanks for enlightening me. I have some short positions too but the big fall looks like it will not come sooner than I hope.

Great blog, I enjoy reading it. Keep the good stuff coming!

# posted by  Jason : 4:06 AM

 

So... are you still short?

# posted by  Jen : 5:09 PM

 

No, stopped out on the breakout to new highs as we stated when we took the position. Will be focusing on a new project now...

# posted by  GreatTrades : 12:07 PM

 

Post a Comment



<< Home

Archives

December 2005   January 2006   February 2006   March 2006   April 2006   May 2006   July 2006   August 2006   October 2006   November 2006   December 2006   January 2007   February 2007   March 2007   April 2007   May 2007   June 2007   August 2007   October 2007   November 2007   May 2008   September 2008   October 2008   January 2009   February 2009   March 2009   April 2009   May 2009   June 2009   July 2009   August 2009   September 2009   October 2009   November 2009   December 2009   March 2010   May 2010   June 2010  

Great Trades Home    Email GreatTrades

Disclaimer: Great Trades may have a position in all or some of the stocks discussed in this blog, but is not paid by any company to promote their stock. Great Trades contains opinions, none of which constitute a recommendation that any particular security, transaction, or investment strategy is suitable for any specific person. Great Trades does not provide personalized investment advice.