Hey Market Pilots,
When the markets were pulling back during the end of April and the beginning of March, I was chronicling the movements of the QQQ. Primarily because the QQQ was beginning to form the first half of a reliable pattern of mine which I call an Elf Shoe or double bottom. You can find the article HERE. But I will include the screenshot from that date so we can compare what I was projecting at the time, to what actually unfolded.
I was pretty darn close in projecting the movement of the index, but really what I was trying to demonstrate was the notion of how a double bottom can be expected based on an initial bounce from lows. The tricky part in this go round was that the QQQ had a fake-out retest of the low. This would be the second bottom of the double bottom pattern which typically holds. In this case, it needed a third test.
Above, you can see that I roughly projected that price would need to come back down to retest the low area. The horizontal spacing is irrelevant to me because I never know how long a pattern will take to unfold, I am more concerned with the pattern overall and the depth of the retest is also up to whatever the market wants.
Now that time has passed and we have the completion of the pattern, we can see that the idea of the pattern was correct and price did come down to retest lows, and then move up. But the initial move up turned out to not be strong enough and so price needed to come down again to repeat the retest of the low area.
Now that the QQQ price is back over the Daily 50 SMA and Hourly 200 SMA, I would say that we have resumed the uptrend. Though I am still looking for a minor pullback next week to actually confirm support (not just break resistance), and once that happens, I can start stepping in with size.
Your Profit Pilot, TG.
Having trouble making money in the market? Join me live on Wednesdays at 10:30 a.m. Central. I navigate the markets and answer your ticker questions in real-time. If it resonates with you, I would be thrilled to help you chart your new path in your trading career.
