QQQ At Important Inflection Point

Thursday, August 4, 2022- Mptrader Pre-Market Update: QQQ

QQQ is at an important inflection price point this AM. Let's notice on my attached 4 Hour Chart that the price structure has hit a new post-June recovery rally high at 324.90, a full 20% gain, and as we speak, is smacking into a MAJOR 7-month resistance line accompanied by a glaring negative Momentum divergence.

The current setup warns us that in the absence of some new bullish catalyst that thrusts price to the upside, resets expectations higher, AND rehabilitates lagging Momentum, the likelihood is for QQQ to peak and roll over into a meaningful correction from in and around the 323-327 target zone. 

That said, tomorrow's Jobs Report could be the very catalyst that propels QQQ higher... or not. Much will depend on whether or not the data inform us about what the Fed's interest rate trajectory might be-- to a neutral rate of 3%, or possibly to 4%?

For today's action, as long as any forthcoming weakness in the QQQ is contained above 321.60/80 the bulls will remain totally in control, attempting to hurdle and sustain above 324.90 for a run at the next optimal upside target zone of 333-335 (a clear hurdle of the 7-month resistance line).

Conversely, a break of 321.60/80 will trigger initial warning signals that QQQ is exhausted, and is vulnerable to lower. A press beneath 318.50/60 will confirm a downside reversal in QQQ... Last is 323.34