QQQ Bounce

QQQ Just Bounced a Second Time Off the Bottom of its Blue Rising Megaphone

QQQ Bounced a Second Time Off the Bottom of its Blue Rising Megaphone

QQQ bounced a second time off the bottom of its blue rising megaphone on Friday. That’s fussy trading.

A genuine breakout through 141 means another new high. Otherwise QQQ is stalling, forming something like a triangle before the trip to the red rising wedge bottom, a bounce there, and breakdown to at least the mandatory retrace level of 105-106.

Gold Textbook Triangle

The Blue Megaphone and Pink Rising Megaphone Lock Gold Into a Textbook Triangle Scenario

The Blue Megaphone and Pink Rising Megaphone Lock Gold Into a Textbook Triangle Scenario

Between the pink rising megaphone and blue megaphone, trading formation rules now pretty much lock gold into a textbook megaphone-inside-megaphone triangle scenario.

An upwards breakout from the red triangle would be an upwards breakout from an inverse head and shoulders bottom with a triangle right shoulder.  The technical inverse H&S target would be at least 1800 but the long move sideways would imply a new all-time high for gold.

Gold Long-Term Rising Megaphone

Gold Long-Term Rising Megaphone

An upwards breakout would usually mean gold was extending its long-term rising megaphone (blue in chart above).

A downwards breakout, which is more likely, would target the 700s and likely lower in the course of forming a bottom.  A downwards breakout would complete the blue-rising megaphone with a retrace to its bottom.

QQQ is Trying to Break Down

QQQ is Trying to Break Down Through Its Orange Megaphone VWAP and Light Blue Megaphone Top

QQQ is Trying to Break Down Through Its Orange Megaphone VWAP and Light Blue Megaphone Top

QQQ is trying to break out through its orange megaphone VWAP for a trip to the bottom of the red rising wedge (green scenario).

If opex trading holds the line here, expect another surge to new all-time highs to complete a cop.  The faster the top, the more likely QQQ is to reverse at the light blue megaphone VWAP for a huge move up.

The slower and bigger the top, the more likely QQQ is to go for the light blue megaphone bottom.

SPY Small Price Channel Set-Up

SPY Price Channel in Rising Megaphone at Top of Larger Price Channel

SPY Price Channel in Rising Megaphone at Top of Larger Price Channel

Yesterday I posted a likely rising megaphone topping pattern (orange on chart above) on a year-long SPY price channel.

Today I wanted to show you a smaller price channel (orange) along the bottom of that orange rising megaphone.

SPY broke the top of that little price channel on June 2nd in the channel’s critical decision wave, where the price decides whether to break out into a melt-up or start a top.  SPY then put in a nice partial pullback into the channel.

Today SPY is poking through the channel top again.  This is where the melt-up set-up (green scenario) lives or dies.

SPY has to either get going screaming higher–and pronto–or it’s electing to form a channel top (purple or blue scenario).  The blue scenario should have been connected to the first purple wave down, not the second.  SPY could also form a rising megaphone or rising wedge for the little channel top.

Whatever little top the channel forms, it should also in the end work out to a head and shoulders top on the orange rising megaphone.