Friday’s wild-eyed thrust looked well capable of propelling this MIRV to the 368.70 target shown. This is notwithstanding QQQ’s trouble getting airborne after its initial push past the midpoint pivot at 333.09 back in March. Once it finally got its footing with a return to the green line, DaBoyz apparently decided there would be no more deciding until new, Olympian heights were achieved. The relevant pattern is too obvious to the droolers of the trading world to offer an opportune place for us to get short, although there is probably close to zero chance that a tradeable top will NOT occur close to the blue ‘D’ line. It’s a matter of how long it takes for a decent pullback to occur, and my hunch is that it will take more time (and patience) than any of us is willing to devote to the task. There is one more possibility we shouldn’t overlook: Shorting via an rABC pattern, with ‘c’ pegged at around 359.80. That’s the arithmetical middle of the void between p and p2, and therefore a good place to look for a downturn from within the ‘discomfort zone’ that has become the focus of our trades. The point ‘a’ high I prefer for anchoring the pattern before ‘c’ occurs lies at 324.33, a peak recorded on March 2. For newcomers, that implies the short would be triggered by a downturn of exactly 6.71 points from somewhere very near 359.80. Exactly how near? That’s a question that will be easier to answer when we’ve seen how this fusion reactor trades on Monday. ______ UPDATE (Jul 10): There’s still no doubt about where this steroid-addled stallion is going. But check option prices going back six months if you need to be convinced that not a dime was made by anyone who owned them the whole way up. Covered writes were another matter, however, since the steady, steep trajectory of the run-up would probably have pushed their annualized yields above 15%. ______ UPDATE (Jul 15, 6:05 p.m.): I am suggesting butterfly spreads — now, but with possible with scale-in buying if QQQ gets second wind and pops to the 368.70 target. It remains viable, but I don’t want to get shut out of the short if QQQ has already topped. For details, check posts in the Trading Room from this morning, starting at 10:34.
QQQ – Nasdaq ETF (Last:360.44)