Systematic Trading Strategies and Next Level Trading Setups

A Key Momentum Indicator Shifts from Bullish to Bearish for QQQ – with video (Free)

QQQ remains well above the rising 200-day SMA, but clearly shifted from bullish to bearish over the last two months. Today’s report/video will show this momentum shift and analyze the short-term continuation pattern taking shape.

The chart below shows QQQ trading well above the rising 200-day SMA. We could make the case for a long-term uptrend, but the immediate trend is down. QQQ formed a lower high from July to September and a lower low from August to September. As far as I am concerned, the path of least resistance is down.

I am also bearish because RSI shifted from a bullish range to a bearish range. RSI typically ranges from 40 to 80 during uptrends (green shading) and from 20 to 60 in downtrends (red shading). Notice how RSI broke above 60 in mid January and then ranged from 40 to 60 during the bull run from mid January to mid August. RSI broke this range in mid August and the 50-60 zone becomes momentum resistance (red shading).

Short-term, QQQ fell sharply in September and then consolidated with a pennant taking shape. Pennants are short-term continuation patterns that get their trading bias from the prior move, which was down. This pennant is a bearish continuation pattern and a break would target a move towards the 200-day SMA. I covered this pennant in Thursday’s Chart Trader report and video.

This week in Chart Trader: We introduced a short-term breadth model designed to identify oversold conditions and signal upturns. It is currently oversold and remaining oversold. Each Chart Trader report and video also includes trading setups for stocks and ETFs. An 8-day trial is available.  

The TIP Indicator Edge Plug-in for StockCharts ACP has 11 indicators to enhance your analysis and trading. These include the Trend Composite, Momentum Composite and ATR Trailing Stop. Click here to learn more.

ChartTrader – Long-term Bearish and Short-term Oversold. Symbols: SPY, QQQ, USO, XLE, HACK, DD, EXPD, HPE, RL (Premium)

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The S&P 500 SPDR (SPY) almost tagged its rising 200-day SMA after a sharp decline from early September to early October. SPY is short-term oversold, but the weight of the evidence is bearish. The Composite Breadth Model is at -1 and most stocks within the index

ChartTrader – Long-term Bearish and Short-term Oversold. Symbols: SPY, QQQ, USO, XLE, HACK, DD, EXPD, HPE, RL (Premium) Read More »

Chart Trader – Breadth Remains Bearish, but Short-term Breadth is Oversold, QQQ Holds up Best, 5 NDX Stocks (Premium)

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There is a clear bearish chain of events over the last few months. It all started when the Russell 2000 ETF, S&P 500 EW ETF and S&P MidCap 400 SPDR failed at their February highs in July. SPY and QQQ were well above these highs, but small-caps and mid-caps were not keeping pace

Chart Trader – Breadth Remains Bearish, but Short-term Breadth is Oversold, QQQ Holds up Best, 5 NDX Stocks (Premium) Read More »

Chart Trader – SPY Becomes Short-term Oversold, Benchmark Lows, 3 ETFs and 3 Stocks Holding Up in September (Premium)

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SPY and QQQ remain in corrective mode, but they are both oversold after sharp declines the last nine days. These oversold conditions could pave the way for a bounce in the coming days. The risk is that SPY becomes oversold and remains oversold (continues lower). Most

Chart Trader – SPY Becomes Short-term Oversold, Benchmark Lows, 3 ETFs and 3 Stocks Holding Up in September (Premium) Read More »

Chart Trader – Correction Targets for SPY, Yield Spreads Hold Up, Two Defensive ETFs Hold Up in September, Five Stocks (Premium)

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SPY and QQQ broke down last week and the medium-term trends are down. That’s the negative news. On the positive side, the long-term trends are still up and both are well above their 200-day SMAs. This suggests that the current decline is a correction within the long-term

Chart Trader – Correction Targets for SPY, Yield Spreads Hold Up, Two Defensive ETFs Hold Up in September, Five Stocks (Premium) Read More »

Finding the Leaders after a Sharp Decline – with Video (Free)

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Stocks fell sharply in September with the S&P 500 SPDR (SPY) breaking below its August low. Chartists can now use this low as a benchmark low to gauge relative performance. Stocks that held above the August low are showing relative strength. This is valuable information because stocks that hold up better during declines have a better chance of moving higher. Let’s look at an example.

Finding the Leaders after a Sharp Decline – with Video (Free) Read More »

Chart Trader – SPY and QQQ Buckle, Downside Projection, Oil Hits Extreme, A Bearish Setup in Retail (Premium)

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The near-term outlook is negative with SPY and QQQ in corrective mode. Today’s report will put forth some downside projections, but take these with a pinch of salt. Or rather, take these with a handful of salt and a shot of tequila. Projections are subject to change should

Chart Trader – SPY and QQQ Buckle, Downside Projection, Oil Hits Extreme, A Bearish Setup in Retail (Premium) Read More »

Two Key Groups Take a Turn for the Worse – with Video (Free)

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A few large-caps and large-cap techs are holding up, but other areas of the market are showing weakness. Namely, the Retail SPDR (XRT) and Regional Bank ETF (KRE) are two of the weakest groups right now. These two groups are under selling pressure and this could bode ill for the broader market. Why? Because they represent key areas of the economy.

Two Key Groups Take a Turn for the Worse – with Video (Free) Read More »

Chart Trader – SPY and QQQ Hit Moment of truth, Retail and Banks Lead Lower, Breadth Wanes, Gold Perks Up (Premium)

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It ain’t over until large-caps buckle. SPY and QQQ have yet to break short-term support. These two are holding the market up because we are seeing widespread weakness outside of a few large-caps. The S&P MidCap 400 SPDR and Russell 2000 ETF hit their lowest (closing) levels since late June. The Retail SPDR hit its lowest (closing

Chart Trader – SPY and QQQ Hit Moment of truth, Retail and Banks Lead Lower, Breadth Wanes, Gold Perks Up (Premium) Read More »

Chart Trader – SPY and QQQ Affirm Supports, Breadth Indicators Lag, Three ETFs and Five Stock Setups (Premium)

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SPY and QQQ fell back after their breakouts and bounced off broken resistance levels. These short-term bounces affirm supports and keep the short-term uptrends alive. It is important to monitor these two because the rest of the market looks rather shaky. Breadth is not keeping pace, September seasonality is here and mid-caps are lagging.

Chart Trader – SPY and QQQ Affirm Supports, Breadth Indicators Lag, Three ETFs and Five Stock Setups (Premium) Read More »

Chart Trader – A Fragile/Split Market, Monitoring Breakouts, Stock Setups for Chemicals, Steel, Gaming and Healthcare (Premium)

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The market looks fragile and is definitely split. Large-cap techs are leading, small-caps are lagging and mid-caps are caught in between. The long-term trends are up for SPY and QQQ as both hit new highs in July. The S&P MidCap 400 SPDR (MDY) and Russell 2000 ETF (IWM), in contrast, did not break their early February highs. They are largely range bound

Chart Trader – A Fragile/Split Market, Monitoring Breakouts, Stock Setups for Chemicals, Steel, Gaming and Healthcare (Premium) Read More »

Chart Trader – Seasonality, Yield Spreads, Long and Short Trend, 3 Healthcare Relative ETFs and 6 Stocks (Premium)

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The chart below shows 25-year seasonality for the S&P 500. There are three strong periods and three weak periods. The strong periods are mid March to early May, July, and mid-October to yearend (green arrows). The seasonally weak periods are January, mid-February to mid-March

Chart Trader – Seasonality, Yield Spreads, Long and Short Trend, 3 Healthcare Relative ETFs and 6 Stocks (Premium) Read More »

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