Friday’s spirited bounce came from within a split hair of the ‘discomfort zone’ low I’d proffered in the chat room a day earlier, but bulls shouldn’t get their hopes too high. Although I am open to the possibility that this short-squeeze rally will pick up tempo enough to set up a lunatic leap to new all-time highs, that’s not what I expect. Notice the head-and-shoulders formation in the chart (inset). Although fans of this pattern could have asked for better symmetry on the right shoulder, the overall look of it is impressively bearish. The effect is compounded by an ‘island reversal’ that effectively stranded a mountain of supply above the shoulder line. Another factor giving bears the edge is that the 382.78 top on September 7 occurred just three cents above a Hidden Pivot target I’d drum-rolled back in January. All of the above argues for a bearish bias for trading the bigger charts. Please note that the smaller ones have yet to produce a bullish impulse leg even on the lowly 15-minute chart, shown here. (The same is true of AAPL, our #1 bellwether and proxy for institutional mindset: Its ostensibly nasty short squeeze on Friday did not exceed a single prior peak even on the ’15’.) _______ UPDATE (Oct 4, 5:05 p.m.): Here’s a nice pattern that projects down to 341.87. Let’s see if bears can crack the midpoint support on Tuesday. _______ UPDATE (Oct 5, 5:23 p.m.): QQQ went the wrong way, tripping a mildly appealing ‘mechanical’ short at the green line (356.41). We’ll spectate this time rather than pray for ruin overnight. ______ UPDATE (Oct 6, 8:26 p.m.): The would-be short failed to touch the red line where it could have been covered, suggesting DaBoyz were bullishly in control from the get-go this morning. They will be even moreso when the regular session begins on Thursday.
QQQ – Nasdaq ETF (Last:359.67)