News continues to trump everything else and all the news is spun so that markets react positively, at least intra-day. Markets have gotten extended above their respective 20DMA’s and are even more so above their respective 50DMA’s. But this is meaningless, so far.
Below is a 60min chart of the Q’s showing that the RSI dropped close to 30 yesterday and then the Q’s bounced. Interesting that the RSI on the Q’s has not dropped below 30 since July 20th. On the daily chart, Q’s have made two new highs since August 20th but the RSI has not confirmed so we have negative divergence there. But that’s TA and TA is anachronistic in this market. Basically, the bounce that began yesterday in the Q’s is most likely to continue today and the $NDX futures at this moment, 7:45 am, ET, suggest this is in fact the case. I’m not a gap person, but if Q’s can get into the gap at 70.08 then they’ll probably run to the most recent high of 70.54. If that happens and if Q’s blast through that 70.54 area with good volume, then most likely headed higher for several more days. But we’ll see. A.M. pump in futures could just be the Big Boyz setting up their short positions. Time will tell on that.
Last Friday’s huge volume came as a result of futures contract expiration and roll over to the December futures contract. After the last roll over in June, markets moved higher and then gave us a nice buying opp. Sure would like to that happen again but I have no way of knowing if that is in the cards.
GL and be careful.