Hey Market Pilots,
We finally got the pullback I have been looking for, but this is only the beginning. We had a dip on July 8, but that dip was bought and price did not get rejected by the 15-minute, 50 simple moving average (SMA). This moving average is what I use to initially see where a move is going. While I was looking for it on July 9, it didn’t happen and therefore no short trade.
Then we got another break last week on July 15 and this put price solidly below the hourly 50 SMA, unlike July 8 where price ended up bouncing off the hourly 50 SMA. After that, we got the confirmation I was looking for, which was price getting rejected by the underside of the 15-minute 50 SMA which happened on July 16 (pictured below).
It’s always a challenge determining where price will go, but upon the initial pullback I typically see price go to the daily 21 exponential moving average (EMA). This means we should watch out for support or a bounce when the QQQ reaches the daily 21 EMA (pictured below). As we continue to let time pass, we will need to see how price will interact with the daily 21 EMA and if there is going to be significantly more downside or if there is going to be a decent sized bounce. It’s this kind of unknown process of going from an up trend to some kind of down trend which has me believing it’s only the beginning.
There are a lot of “tree branches” as I like to call them of support below us and that is why playing the short side can be tricky. Be nimble and take profits quickly as the market has been changing character and the indexes are finally reflecting that.
Your Profit Pilot, TG
Interested in trading like TG? Click here to learn more about his Moxie IndicatorTM tool.
