Nasdaq Q's Coil Pattern Not Necessarily Bullish

By: Mike_Paulenoff

It should come as no surprise that the Q's (NASDAQ: QQQQ) have been carving out a coil pattern off of Monday's high at 30.46. Normally, a coil at the top of a potent upmove should be considered bullish, and should resolve to the upside -- in this case in a thrust to new recovery highs projected into the 31.25 area. Normally?

For me the fact that the coil started with an up-gap open on Monday am skews the likely resolution because that GAP may well "need" to be filled (29.03-29.44) prior to the expected upleg to 31.25. I am just guessing about that, but my work is warning me to remain 25% long the SDS (UltraShort SPY ETF) at this juncture in our model portfolio, rather than holding a long position in the Q's in anticipation of a thrust to 31.25 sooner than later.

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By Mike Paulenoff

Mike Paulenoff is author of the MPTrader.com (www.mptrader.com) , a real-time diary of Mike Paulenoff's trading ideas and technical chart analysis of Exchange Traded Funds (ETFs) that track equity indices, metals, energy commodities, currencies, Treasuries, and other markets. It is for traders with a 3-30 day time horizon, who use the service for guidance on both specific trades as well as general market direction

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