QQQ Daily Chart W Pattern Bottom Bear Flag Gaps

The QQQ is an ETF that tracks the Nasdaq 100 and serves as a proxy for the technology sector. Considering Apple's earnings debacle this evening, the Q's will likely receive a severe beating tomorrow. AH's show a drop of about 2%.  The W pattern bottom laid the groundwork for the move to 68 which was achieved.  The first leg of a bear flag occurs from 68 to 60, then a sideways flag consolidation. Right now we find out if leg two is underway. The lower target for a leg two slide is 66-8 = 58.  If the second leg down started at 65, the target would be 57 so call it 57-58. This corresponds to a gap fill at that level.

Price will likely drop thru the critical 50-day MA tomorrow. Therefore, the 200-day MA at 61.25 takes on huge importance especially considering that a gap fill is needed at that level as well.  If price loses the 200-day MA, the target at 57-58 will most likely follow along. The indicators exhibit more of a sideways vibe going forward so watch closely in the days ahead to see if price collapse occurs, or not.  At the 61-ish level, the gap fill area and 200-day MA, Keystone will consider adding to the TECL (long tech) position. The price action will have to be assessed at that time.  If the bears are pressing hard and the 200-day MA fails, any adds to tech longs will be better served by waiting for the lower target area.

Projection is for a gap fill and test of the 200-day MA at 61-ish, then likely a move to 58 to fulfill the bear flag.  The bear flag is very important since the same pattern exists on many indexes and stock charts. If the QQQ bear flag plays out, rest assured it will play out for all other charts as well. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.