Stock Market Timing

In War There's No Prize For Runner Up

Technical Analysis Of QQQQ (You Should Be In Cash)

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I have been evaluating a huge amount of gossip on today’s chart about how the volume on the buy side is genuinely dreadful. This is simply not factual in regards to the Nasdaq.

Buy side volume has been escalating into the upward move. Provided you watch my vids you understand that I utterly love buy side volume rising into a up move. That implies more and more followers are switching over to the bullish side.

One more reason behind why this is bullish not only for the Nasdaq but the whole stock market is because of sector rotation theory. Technology stocks are often the first to guide the market out of a bear market.

Think about it. Where is the modernization coming from to cut costs to business? Technology. A greater number of businesses have picked up their use of email and decreased their use of regular postal mail to save costs. Greater number of businesses are purchasing more computers to advertise for free over the Internet and save money on in-print marketing. Quicker copiers are being purchased with instant convert to pdf and email from copier capabilities. Certainly, lean and mean businesses will a recession create and technology is the essential factor that makes efficiency and expense reduction feasible. That’s why it makes sense that technology is the bull market leader coming out of a slump.

From a technical analysis standpoint you should not be stock trading in this market. You ought to be on the sidelines right now as no dominant group, neither bulls nor bears, have come out as the leader. At the end of June the bears held the trend but all that changed in July. Over the last 2 weeks, the bulls have been so influential that they have canceled the downtrend and forced us into a cash and sidelines rating.

Still if we do get a pullback now, I bet we’ll have a higher low and a fresh trend channel can cultivate. Take into account, most trend channels have lifespans that are a good deal shorter than the present downtrend channel we have had since April. Put another way, this channel is outside its life expectancy and we should have a fresh one form soon.

The technique to play this market is to stay in cash and let the big boys battle this out for dominance. You are a little warrior and do not wish to get trapped between two attacking armies. Stay in the bush and let the armies fight it out. As soon as one army, either bulls or bears, becomes dominant, then jump out of the bushes and attack on their side. Only place your bets on the winning side once a obvious dominance or trend has formed.

In this episode I perform technical analysis on QQQQ and update you on why you should be on the sidelines and in the protection of cash.

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