Don't Ignore This Chart!

Minding the Gap on QQQ


The London Tube is famous for its automated announcements reminding commuters to "mind the gap" between the train and the platform (don't fall in). QQQ has a gap that we should also mind. Notice how the ETF opened above 101 and closed above 101 the last four trading days. A close above 101 today would mark the fifth, but not the fifth of the fifth of the fifth. Sorry, I couldn't resist a little jab at Elliott. The ETF is clearly stalling, but the gap is holding and remains bullish as long as it holds. A close below 100 would fill the gap and provide the first sign of material selling pressure since the first half of October. Should this gap become filled, we would then call it an exhaustion gap and consider it bearish. 

Click this image for a live chart. 

Arthur Hill
About the author: , CMT, is the Chief Technical Strategist at Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London. Learn More
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