The Cubes (NASDAQ: QQQQ): 3:45 AM NYC time, June 30th: Just a quick post to note Thursday’s huge relief rally after Tuesday’s shakeout and Wednesday’s intraday reversal to the upside. The Cubes were finally able to close above the 20-day EMA, after almost two months of trying and failing to do so. The 3% rally was the biggest since…
…October 28, 2003, and came on about 1.5x average volume. This qualifies as a follow-through day, but with an asterisk since the follow-through day came on the 12th day of the rally, which is a few days beyond the preferred range. Still, it was enough for IBD to change its market outlook to “Confirmed Rally” and to say that “volume indicators left no doubt.” For me, there is a some doubt. This smells like a short covering rally that will end by the time more shorts are forced to cover. Still, I have learned — the hard way — that it doesn’t pay to argue with Mr. Market, who always has the last word.
So what’s it all mean? It means I will most likely sit this “rally” out except for possible very short-term trades to the long side, looking for a reversal candles at the moving averages (about $39.25 and $40) and the other key resistance levels, which happen to be around the round numbers $41, $42 and $43. Cheers!
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