T2W Trading Community

Thu, 17th Feb 2005 - 19:32 GMT (QQQQ = 37.64)

On the four-day view, there are multiple new developments, of which the high volume breakdown candle (21) through 20/50MA which triggered the IT move from L to N is the most important. First close below the 50% retrace line (22) and a new low underneath the SR at (16). This also coincides with a 20/50MA crossover which confirms the parlous state of Q at this time. We are now looking for both Short Term (ST) on the 30min and IT on the 60min for first potential clues for a snapback: it seems all a little swift to the downside, precipitated largely by Fed testimony and heightened GP risk (geopolitical risk).

Wed, 23rd Feb 2005 -13:19 GMT (QQQQ = 36.89)

Friday opened with a –BE at 23, a weak rally to the steeply falling 10MA (green) & then a heavy volume plunge through 200MA (24). There was no sign of a rally after this initial bout of weakness, confirming the severity of this decline, as Q stayed below the 10MA all session. Tuesday’s gap down (25) was followed by a heavy volume candle which hints at latent buying power as we approach a logical area for an oversold rally. When this rally failed almost immediately just under 20MA at 26, and negated the prior rise within two hours, Q rolled over to the key SR area under 37, forming a new SR2 tweezer at 36.80, closing a fraction above the prior low of 10 Feb. We remain on the sidelines intermediate term (swing trade timeframe), awaiting clearer signals and stability, while in the shorter term timeframe we would be surprised to not see an attempt to rally after this sharp decline.

Wed, 23rd Feb 2005 -15:38 GMT (QQQQ = 36.86)

RSI 14 still holds a rising trend (31) after attempting (30) to break above the downtrend line initiated at the spike (80 RSI 14).

Thu, 24th Feb 2005 - 16:24 GMT (QQQQ = 36.97)

Rising trendline (32). Neutral HWC 30. Thrust through 10/20MA with potential for 10/20MA crossover / ST N to L.

Thu, 24th Feb 2005 - 20:00 GMT (QQQQ = 37.27)

Textbook +BE shaping up on the daily chart, but hourly chart triggered the ST L nearly 4 hours ago. Moderate volume thrust through 10/20MA with 10/20MA crossover off of a new rising TL3 (trendline with three touches), followed by heavy volume confirming pivot breakout through 50MA. Next barrier is failure breakout move (26) from 22 Feb. The supporting cast (+BE D chart) adds evidence that this is more than a very transitory one day bounce, but nothing is clear in this Q market for now: take each bar one at a time to dictate short term tactics. New 8pm candle starts off on the right foot (i.e. up) (37).

Fri, 25th Feb 2005 - 16:19 GMT (QQQQ = 37.44)

Bounce off mid point of nearest tall up candle (39) and the shallow 25% retracement line (38). Fresh attempt to scale and hold the 37.50 level fails for now. Friday breakouts are not as frequent, as position squaring in front of the weekend often prevails. New +BE (40).

(click to enlarge)

Mon, 28th Feb 2005 - 15:15 GMT (QQQQ = 37.42)

Scaling out of 50% of ST (short term trade) following the new –BE (42) and a break through 10/20MA. The 50% remaining is there for the ‘bounce’ scenario from well-defined near term SR starting at 37.30.

Mon, 28th Feb 2005 - 17:04 GMT (QQQQ = 37.24)

ST/N. S1 hit at 37.28 on 2nd 50%.

Mon, 28th Feb 2005 - 17:20 GMT (QQQQ = 37.16)

The -BE (42) was a standout print after the move up since the 23-24 th base. Sharp fall through 10MA is ususally not a good sign (43), and wasn’t this time around. 2nd steep negative candle of the day following a pause at the (very high) high wave candle broke the rising 20MA and prior SR (37). S1 at 37.28 (red line 45) closed us out which is just as well as we fall sharply through successive retracement levels & MA levels. Volume still not a feature today, and with the +BE daily still registered we could be seeking out a sharp bounce once this gale subsides.

Tue, 1st Mar 2005 - 18:19 GMT (QQQQ = 37.44)

The lower shadow of +BE (46) printed precisely at the intersection point of the 10/20MA cross which gave us that ‘close to perfection’ upmove off the Feb 23-24 th mini-base. Due to the steepness of the fall from (42) to (46), our usual MA ‘reference points’ were still playing catch-up as Q rallied off the 36.92 level: a classic v shaped rally which day traders love, but not quite as useful for ‘swingers’. Lower shadows kissing the red rising trendline all the way up on this rally, unlike the 24 Feb move: this one’s for suckers, or something more durable? Supporting the latter view are the shape of the 20/50 MA, where 20 held above 50 which is now just turning up (47).