The Trump Tweets That Changed the Market Direction: QQQ as of Nov 9, 2018

Are the tweets from Trump a well timed effort to pop the market higher right before the mid-term election? I will let you decide.

Following is a 30-minute chart of Nasdaq 100 ETF (QQQ).

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Red Arrow Nov 1st around 10:15 am ET Trump tweeted about US-China Trade. US Stock Market took off. And I can no longer find that tweet.

Orange Arrow. Nov 2nd around 2:30 pm ET Trump tweeted again on US-China Trade when both US and China officials denied what his says. I cannot find this tweet either.

Green Arrow Nov 5th all morning rumors and then by 3:00 pm ET, announcement of polls showing GOP was leading.

All three attempts are done right at the moment that QQQ was about to flush lower. Much lower.

Because of the way the market being affected was so subtle, majority of the people who are not close enough to the markets are not aware of the subtle change in the dynamics. I am not going to name names but you all know who they are.

Short-Term Outlook

So what to expect from here.

1. As long as Friday low holds up, the red zone above will be in play and could happen very quickly.

2. Pushing into the red zone first without touching the green zone below, if resulted in a close below that, will point to another flush lower to the green zone eventually.

3. A very strong support zone is now built at the green zone below. Any selloff getting into that on the first try can lead to explosive rallies.

The whole situation with such wide target / action areas was the aftermath of the forced change in market direction.

Originally I hoped that we will have a calmer market (i.e. VIX < 15) after the election. Well we do not always get what we hope for, do we?

The messy swings will likely continue for at least a few more months.

Hang Seng Index as of Nov 2, 2018

Hang Send Index weekly chart below.

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1. Long term 3 pushes up completed at failure to clear the long term top

2. Up channel structure in potential trend change

3. As long as 2nd push up swing top (red zone) is not cleared, minimal downside target near midpoint of complete range (cyan zone)

4. 3 pushes up normal target is back to where it started (green zone)

5. If HSI manages to clear red resistance zone and hold above that on weekly closing basis, it will be able to challenge the all time high

Apple as of Nov 2, 2018

Apple weekly chart below.

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1. Apple has 3 major runs higher since the year 2009 bottom. If we label the middle one as one unit of time, the first rally took two and the latest one has used one and a half units so far.

2. The current rally started from year 2016 is actually a parabolic run composes of two leg of equal length. Parabolic run often marks an important top or bottom for at least half the time spent on the run. So we are looking at 6 to 8 months consolidation.

3. Last 2 corrections / pullbacks (highlight in green down trendlines) are about 45-50 dollars each, if that repeats, we will see 190.

4. Key weekly pocket zones are 195, 182 and then 135.

5. Long term channel structure is intact with Apple completed the 150% expansion. It is normal to move back down to the midpoint of the expanded channel which is around 180 at the moment.

6. Up trendline in blue highlights the current support which is still very far down below.

7. So even if Apple somehow managed to make a new high against the 250% expansion boundary, it is still like to move back down to below 200. Longer it spends its time up there, longer and steeper the selloff will be.

A Tale of Amazon, Microsoft and Intel as of Nov 2, 2018

Long term players do not look at the charts like the active traders. They care much about the trend and the long term averages. Here is a chart of Amazon, Microsoft and Intel with their monthly 12, 24 and 36 period simple moving averages.

Are these long term players concerned?

Hint: Of course they are since the beginning of this year. That’s why we have this sell off.

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The more important question: Are they willing to buy these market leaders now?

Update: What to Expect Next from QQQ as of Oct 27, 2018

QQQ 30-minute chart below. All chart markings the same as the one from Oct 11. Obviously, the double top target is now tagged.

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What to expect next? This we have to use STOPD to tell us whether the process is completed.

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The start of this selloff was a rejection of 3rd quarter high. It swiftly dropped to right below 3rd quarter low (the higher red line) and bounced.

Then 2nd quarter high acted as resistance and sent QQQ down to the 3 pushes up target. But 2nd quarter high resistance implies 2nd quarter low (153-154) and potentially year low (150) being the targets.

So the price to watch out for is whether 3rd quarter low up to January high acting as resistance or not.

Interestingly, that lines up with the up channel bottom on daily that was just breached this week. See the chart below.

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The orange lines highlight the January range. January being the open range for the year has already given us the top of the year so far by its 100% expansion to the upside. Failing to close above the resistance zone mentioned earlier (the cyan box) means we are likely going to see a drop to January low, year low so far and possibly expansion down to 140-142 area.

Update: Amazon as of Oct 27, 2018

Amazon weekly chart below. First target tagged.

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What to expect next?

If Amazon starts to bounce from here but fails to clear midpoint of this drop, the green zone below is the next downside target.

If the blue zone turns into resistance, it will be the nightmare scenario for bulls.

Nice Catch: QQQ as of Oct 11, 2018

Quick update on where we stand at this point.

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Double top (purple lines) with 100% and 200% targets highlighted.

Three pushes up (orange lines) with starting point highlight by the horizontal cyan line on the left.

In combination we are looking for the cyan box to be tagged soon. My guess is Friday or Monday.

Announcement

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Update: Tesla as of Oct 7, 2018

Same chart as the one posted back in Aug 18 with new highlights on what to watch out for.

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Orange down arrows mark the potential double top.

Why the higher high in between does not count? You need to spend some time learning Special Theory of Discovery …

The same support zone I projected is now at risk to be taken out.

Until TSLA trade back above the red down trendline and close above that on weekly basis, without breaking the up channel support, Tesla is at best going sideway in coming months.

Breaking below the bottom boundary of the blue zone is a confirmation of the double top setup with much lower price level in play.

Forecast: Where is Dow Jones Industrial Average Heading as of Oct 2, 2018

Following is the weekly chart of Dow Jones Industrial Average.

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The 10 year STOPD level projection tells us where the likely maximum boundary for the current 10 year run will be. It is marked by the red horizontal line at the top.

Parabolic run exhausts itself on the 3rd round most of the time. We are reaching the end of the 3rd round.

Last 2 corrections / consolidations after each run last about 2 years.

It will be tough not to get a steeper correction.

You’ve been warned.