You wouldn’t know the day was so choppy by looking at the daily chart. But it was another choppy roller coaster session. I took an extra dramamine. The day started off with the gap up in the Nasdaq inspired by the upbeat guidance offered by Cisco. The cycles all day were quick and indecisive, but at about 12:40 eastern the market took off to the upside to make a nice run, and then about 2:30 it turned around on a dime, the Dow lost all the gain and was in the red for the day, with the Qs leaving a nasty looking upthrust bar. Then in the final half hour the market came roaring back to the upside and settled closer to the highs of the day.
I just included the QQQQ chart, although the S&P and smaller cap indexes made better percentage gains today. The Qs have the only uptrend at the moment. The other indexes still look like bounces within downtrends, but that of course could change. The red and green dots on the price bars are put there when the short term momentum indicator, in yellow in the subgraph below, turns up on the side of the blue signal line. This is the indicator I use to determine the short term momentum in my “Trends” tab. The black and white lines in the indicator in the bottom subgraph is the 5 and 10 period double stochastic. I use this as a confirming indicator. At the moment all momentum and trend indicators that I use are pointing upward. There is probably some resistance at the 50% retracement area, which is about where the Qs closed today, and overhead is the fib level around 49.25. Due to the extent of the previous sell off, and the bearish looking charts on the other indexes, I would still think that re-tests of the recent lows should occur. Some of the options on the Qs have had very nice percentage moves in the last couple of days and profits should be protected. On the other hand, Cisco had a nice breakaway gap from a bull flag pattern, although a 1/2 point of profit taking near the close, and if there’s any followthrough to the upside it will probably spill over to the rest of the tech sector and the Qs might be able to test recent highs. So my opinion is the market can either go up or down, which doesn’t help much, so I’ll just have to follow my indicators instead of thinking, and for the moment they are up.
You can see a thumbnail of the intraday activity on the etfs on the Trends tab on the Yahoo bar I just installed.