The blue candle showed on Friday when the job market report didn’t make the grade. The sell-off occured in the first a few minutes and last hour. Before the last hour plunge, it actually recovered most of the loss.
The volume (judging from SPY chart) was more than 50% higher than average.
It was rumored that a big firm sold a lots of puts to their customers and had to sell ES to hedge their position, thus the big plunge in the last hour.
Since the uptrend line is still intact, Monday’s open shall give us some indication of where the market will go. Currently, it’s pretty extended. It would make sense if it goes sideway for a few days or a week to ease up the over bought condition. I would not be a buyer at this time. I will look for weakness to short it.
Since it broke its long term downtrend in last November, QQQ rose rapidly from low of 20 to near 28, then it was in a trading range for 4-5 months. In June, it broke out the range. The next resistence level is around 34. With recent run up, it may go sideway for a while before charging ahead to the resistence level near 40 provided the overall market condition is improving. The current support level is at 29 and 25 is the major support level.
QQQ is moving sideway a lttle. It starts building a base around 30. Based on the daily chart, it may test the uptrend line at the previous resistence, now the support, which would be a good entry on the long side. If it breaks from current base, go long.