Here is what I have been tracking with my technical analysis. What we saw since the end of July is the AI bubble losing its momentum.

What happened?
  • You can see on June 24th where price gaps up above the long-standing blue trading channel from 2009 that contained trading from 2009 until the 2020 bubble.
  • You can see it gap down back into the blue channel on July 24th.
  • It found some support on the mid-line of the longer running black channel from 2009 that includes the covid bubble peak.
  • Then we got a test of the blue channel resistance on August 1st with a very strong rejection.
  • Then the bottom dropped out to break below the AI rally purple channel.


Where are we now?
  • The morning open on Monday saw a test of the red trend line with a strong rally to back above the 200.
  • We saw a test of the previous purple channel with a high wick on Tuesday.
  • Today (Wednesday) saw a strong rejection of the channel, where it looks like support has now become resistance. We saw the high wick touch the orange price line around $449. The good news is that the 200-day SMA is showing support again.


Where are we going (this is my guess)?
  • It looks like the market is trapped between a rock and a hard place. I think the 200 day and the red trend line are going to give QQQ support as long as there are no other panics.
  • It is unlikely that the AI momentum will be coming back either.
  • I think it is going to drift sideways for a few days before picking a direction. This means it may bounce up and down between the purple channel and the 200-day into next week. You can see the red down channel that has now formed.
  • If we do get a counter rally then I would expect it to stay inside the channel. That would leave us with a potential another leg down. The RSI is only a little into the oversold range. How far? My guess would be either the red trend line again, or maybe even farther to the center of the blue channel. We get down that low, then I have a bunch of cash to go long.
  • I just can't see why QQQ would rally back to ATH now. There is way too much uncertainty now, but markets are irrational. I could see QQQ working back up the underside of the purple channel until the end of the year, with a lot of up and down action.
  • I really do think that there is a bigger pullback sometime in the next several months. The market is just running close to the top of the decade plus trading channel and the AI bubble may finally become deflating some. I believe that we will see a touch of the center line of the blue channel in the next few months, which could be Nov or Dec time frame. That will give us a lot more room to rally and make some good money.

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I did a quick check of everytime QQQ first touched (or came close) to the resistance of the blue trading channel and then where the price ended up in the coming months/years. I can't say it will happen again, but the odds are significantly in favor that we will see a pullback at some point that will take us noticably lower than the price when it first touched.
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Good day but we are right back at resistance from yesterday, but this time at the close and not intraday high.
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End of week and a close just inside the purple channel.
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NASDAQ 100 CFDnasdaqnasdaq100QQQtechsectortechstocksTrend Analysis

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