Tuesday, February 06, 2007
S&P's, Spiders, and QQQQ's
Here are hourly charts of the March S&P futures, the Spiders, and the QQQQ's. I last commented on these markets here.
We have traded in a very narrow range the past four days. I now think that these markets are about to breakout from this range on the upside. Here's why.
Note the wide range down bar put in this morning. Normally such a bar would preceed a downside breakout. But there was no follow through selling. This tells me that the buyers on that break were longer time frame traders. Then, each of these markets has subsequently rallied to the high of that down bar which is normally resistance. In fact, the Q's have actually moved above that resistance level. Moreover, the current bar is a wider range up bar. This leads me to expect that the resistance level will soon be taken out and if it is the upside breakout will follow.