The Nasdaq into 2017
- Posted by Greg Harmon
- on December 28th, 2016
Three trading days left in 2016 and markets continue to make and flirt with all-time highs. One of these is the Nasdaq 100. The ETF for the Nasdaq 100 ($QQQ) made a new all-time high close on Tuesday. Many will focus on the how that high was made. A trip much higher pulled back to end the day higher, but with a long upper wick. The wick is what traders will not like. A failure to hold the high.
Instead lets look at the bigger picture. From mid October, the QQQ had built a bearish Bat harmonic pattern. It reached the Potential Reversal Zone (PRZ) just after Thanksgiving and reversed lower to rising trend support and at the 61.8% retracement of the pattern. A perfect place to start a new advance. From there it did jump. To new all-time highs in early December. It has held there since.
The consolidation took the form of a symmetrical triangle and Tuesday it broke that to the upside. Along with that the RSI is in the bullish zone and has turned back higher. The MACD has also avoided a cross down and is moving higher. The break of the consolidation gives a target to the upside of 124.45. The weight of the evidence points higher. So who cares about a single candle wick?
Take advantage of the Holiday Sale here! Ends December 26th. Update: Traveling so can’t change pricing til Saturday. your win.
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Gregory W. Harmon CMT, CFA, has traded since 1986 and held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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