We just noted a bearish setup in DIA that has yet to be validated. Well here’s a bearish setup in another major indice, QQQ, that is valid and in play.
QQQ has formed a head & shoulders pattern (gray ovals) over the past two months. Yesterday is broke below neckline support (blue line), which validates this pattern. The measured move (pink rectangle) takes QQQ to 65.50, which puts it on on 1-year support (purple line).
We missed the initial break, but will be watching for a retracement to the 68.00 price area to short into. An AAPL retracement to 660 as mentioned in this article would certainly help that cause.
All in all the indices are noting continued bearish price action, but we are expecting a few upside days which will present excellent bearish strategy entry opportunities.