Since 2009, we've had a clean rising channel on QQQ log chart:
- 3 touches on the bottom (the last one being the COVID low, breaking through the bottom slightly
- 7 touches on the top, until we broke out of the channel bullish immediately post the COVID low
- Since then we've back-tested the channel and remained bullish.
In 2022, everything changed. The first few months of 2022:
- QQQ broke bearish back into this channel but have always come back up
- Monthly RSI dipped below 70 for the first time since COVID
- MACD crossed bearish
- Stock broke bearish
Suffice to say, we may just be starting a monthly downtrend until technical can cool off.
My view is 2022 will be volatile. Inflation is unknown, Fed policy is unknown, Supply Chain resolution is unknown, COVID is (still?) unknown, midterm elections are unknown... and PE ratios are still crazily above highs for most stocks (even with >50% dips in many names).
We could remain flat for the remainder of the year and find ourselves back at the support line of the prior decade's channel... that's what I'm keeping my eye out for. Sell into rallies, buy into weakness.
- 3 touches on the bottom (the last one being the COVID low, breaking through the bottom slightly
- 7 touches on the top, until we broke out of the channel bullish immediately post the COVID low
- Since then we've back-tested the channel and remained bullish.
In 2022, everything changed. The first few months of 2022:
- QQQ broke bearish back into this channel but have always come back up
- Monthly RSI dipped below 70 for the first time since COVID
- MACD crossed bearish
- Stock broke bearish
Suffice to say, we may just be starting a monthly downtrend until technical can cool off.
My view is 2022 will be volatile. Inflation is unknown, Fed policy is unknown, Supply Chain resolution is unknown, COVID is (still?) unknown, midterm elections are unknown... and PE ratios are still crazily above highs for most stocks (even with >50% dips in many names).
We could remain flat for the remainder of the year and find ourselves back at the support line of the prior decade's channel... that's what I'm keeping my eye out for. Sell into rallies, buy into weakness.