CSCO: So, I said that the other day that when CSCO releases earnings that this often marks a top of one degree or another for tech. Usually CSCO disappoints and this serves as a catalyst for a pull back. Didn’t happen, at least not in the way I expected. But despite CSCO’s nice move today, we saw some weakness in several other important tech darlings.
AAPL, GOOG, AMZN, & QCOM were all down today. These heavy hitters make up about 28% of the $NDX and even so, as if by some kind of secret voodoo, the Q’s managed to lose only $0.03 U.S. This is really not the point. The point is that the $NDX has been leading this market around by the nose and the market is going to follow the $NDX regardless of where that is.
Using the 9/20 method on the daily chart of the Q’s, the 9EMA crossed down through the 20MA today, which is a ‘sell’ signal using this method. At minimum this means that adding to the Q’s here could be overly risky and that the Q’s could be headed to the 50MA at 55.81, or even lower.
This chart of the $BPSPX has kept me out of trouble many times in the past. The key is the 14,3,3 Sto and the signal comes when the Sto breaks below 80, which happened earlier this week. This signal says ‘buyer beware’ and initiating new long positions or adding to existing long positions when the 14,3,3 is dropping is going to carry added risks, IMHO, of course.
QQQ 60min chart.
I am looking at the channel on this chart as just another, ho hum, bull flag for now. To prove it’s a bull flag the Q’s need to break out of this down trending channel. I have no indication that this won’t happen, except for the weakness that we saw in AAPL, etc. today. Any more weakness tomorrow in AAPL and the other tech darlings mentioned above and that will topple the Q’s.
The bottom line is that with evident weakness in the $NDX today, with the ‘sell’ signal today in the daily chart, and with the $BPSPX warning that adding to longs here would be risky I am planning on putting my TQQQ on the auction block tomorrow.
You probably think I’m just being paranoid, and you’re right.