I am looking at the QQQQ on the daily and noted the steepness of the recent run and the proximity to April highs. Moving onto the weekly time frame, the QQQQs are about 10+% away from 2007 highs.
After a terrible 2008, tech has made an amazing recovery. Could there be some trapped bulls looking to unload from as far back as 2007?
Breadth recovered nicely after 3 days of retracing, but the new high close on the SPY Friday diverged with the RSI and the MACD histogram (see chart). We also have a gap on the $115-116 area. Mutual Fund Monday gave us an initial pop from some carry over strength but it was short lived indeed.
After 4 straight up weeks, in my opinion we are due for some consolidation this week. Since Friday failed to confirm a reversal lower, we can’t rule out more upside after some back and fill action, especially with the November election only a month away.
P.S. I met Dave and Corey from CSS Analytics and Jeff from ETF Prophet this week in Vegas. It was a casual dinner, but I can tell they are brilliant people and work real hard at what they do. Corey will also be featured in the November issue of Active Trader Magazine, check it out!
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