The question is not IF, but HOW HARD we're about to pull back
Looking at the QQQ in the weekly and monthly chart we can see that we've reached - once again - the top of the monthly uptrend channel (purple) which dates back to June '09. The repeated consequence of this scenario so far was a pullback between 6,5% -23,5% in a couple of weeks depending on the overbought conditions on the weekly charts. The monthly RSI shows a bearish divergence with RSI hitting resistance this month as well.
On the weekly chart we can see another clear top in the makeing - bouncing of of the bright green weekly resistance line with a bearish MACD-cross in the daily chart.
When we look the the Fibonacci Retracements of the past pullbacks we could now estimate a retrace to at least 0.382, if not even 0.618 level .... meaning between 9,5% to 16%+ pullback.
With the whole market sentiment at an all time bullish sentiment, the corona virus spreading and an imminent decline of corporate earnings, stock buybacks and uncertain outcome of a possible supply chain breakdown in the industries we could see fear spreading very quickly once the market stars to react - which it did already, but only in a subtle way....
On the weekly chart we can see another clear top in the makeing - bouncing of of the bright green weekly resistance line with a bearish MACD-cross in the daily chart.
When we look the the Fibonacci Retracements of the past pullbacks we could now estimate a retrace to at least 0.382, if not even 0.618 level .... meaning between 9,5% to 16%+ pullback.
With the whole market sentiment at an all time bullish sentiment, the corona virus spreading and an imminent decline of corporate earnings, stock buybacks and uncertain outcome of a possible supply chain breakdown in the industries we could see fear spreading very quickly once the market stars to react - which it did already, but only in a subtle way....
Comment:
Monthly chart as add-on
