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By Mike Paulenoff, www.MPTrader.com
It should come as no surprise that the Q's (NASDAQ: QQQQ) have been carving out a coil pattern off of Monday's high at 30.46. Normally, a coil at the top of a potent upmove should be considered bullish, and should resolve to the upside -- in this case in a thrust to new recovery highs projected into the 31.25 area. Normally? For me the fact that the coil started with an up-gap open on Monday am skews the likely resolution because that GAP may well "need" to be filled (29.03-29.44) prior to the expected upleg to 31.25. I am just guessing about that, but my work is warning me to remain 25% long the SDS (UltraShort SPY ETF) at this juncture in our model portfolio, rather than holding a long position in the Q's in anticipation of a thrust to 31.25 sooner than later.
Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!
