Looking at the QQQQ in a Larger Time Frame 103007
We’re coming to the end of October. At the beginning of the month, I was biased short… and wrong. It’s often helpful to steb back and look at larger time frames. This grabs a better picture of market activity. The day to day battle is different than the war.
A picture of the QQQQ monthly time frame doesn’t paint a picture of an extended market at all. After setting a pivot low last year, the QQQQ consolidated off of the higher high from November, to the pullback in February. That set up a run higher for three months. You’ll notice the the topping tail in July, and the bottom tail in August. More importantly, the bodies of the candlesticks stayed in the same range. From there, we’re only up a couple of months. That doesn’t look extended.
Moving down to a weekly chart shows an area of minor support that the market could pull back too. Under that is our major pivot support. Don’t use the last resistance area as support. It’s less significant than the last two areas of recent support.
I haven’t taken many trades in the small trading range we’ve had this week. You can see how small it is compared to prior weeks. That probably will change with the Fed meeting and decision tomorrow.
Finally, you can see two more areas of minor support on the daily chart. Don’t use prior resistance points as support. So is the market extended? It doesn’t seem to be. The trend is still up. It does have room to pull back, and not be in danger, as long as those points hold.
