QQQQ...Nasdaq Retracement Levels Hold
Last week I commented that usually markets retrace 50% of a bearish engulfment before heading back down. I said I was waiting for a rally to short QQQQ at 50%.
Well we got the rally and I shorted some at 50% and at .618.. The fibonacci levels held perfectly and I pretty much shorted the highs today in QQQQ. This is one of my favorite trades and works more times than not with amazing accuracy. It's not often I make a dollar profit in QQQQ in just one day. The market fell out of bed in the afternoon but managed to bounce a little going into the close. QQQQ closed below its 50 day moving average on good volume and a large trading range for the day.. I'm going to hold this trade and see how much more downside there is if any.
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7 comments:
Nice trade!
Hey Zen...Did you delete some of your earlier posts today?
No why?
I looked at your blog this morning and thought I saw a post on a weak december is bullish for the nasdaq in January for the first 3 days. I was going to post the link on my blog.
its there, just have to scroll down a bit.
http://zentrader13.blogspot.com/2007/01/santa-in-january.html
kevin, do the fib. lines become stronger resistance as the QQQQ,s bounce off and reverse? great posts, Thanks, Chris
I think the more times any level is tested it actually becomes weaker. Think of support or resistance as a wrecking ball smashing into a wall. The more times the wrecking ball hits the wall, the weaker it gets.. I feel support and resistance works the same way. If QQQQ were to rally back up to the .618 retracement, I would be hesitant to short it again.
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