Tuesday August 29, 2023
9:30 PM EST
G. Allan Collins
The QQQ experienced a 2.18% increase, reaching a closing price of $374.77. Our analysis was spot on as the QQQ performed exactly as anticipated. In our recent private blog titled “Get Ready for A Face Ripper,” we made a bold prediction, and I’m pleased to say that prediction was right on the money. Without boasting too much, I want to emphasize that we accurately identified the market dynamics. Notably, we highlighted the critical resistance level of $367.47, which coincided with the 20 Day Moving Average (20 DMA). Our insight pinpointed a potential short squeeze in major tech stocks like TSLA and NVDA if the 20 DMA was surpassed.
Our forecast extended to the QQQ’s next resistance point at the $374-$375.15 range, and today, that projection materialized precisely. In terms of trades, we successfully managed our positions in NVDA and TSLA, including our short position in TSLA initiated at $299. Details about our shorts and puts, along with their respective prices, can be found on our Twitter account.
Our total gains amounted to a commendable 48% through TSLA Puts and the common stock we held. As is our practice, we seized opportunities when the market moved our way, even though we aren’t day traders. We prioritize locking in profits when we witness rapid gains and encounter resistance, exercising caution and ensuring our gains are secured.
Current Situation: The QQQ now hovers around a crucial resistance level at $375. Additionally, the Bollinger Bands indicate extreme compression, and an upper Bollinger Band breach to fill the gap could push the price above $380. I anticipate sideways to downward movement and further consolidation before the next significant market shift. Notably, the Triple Q’s critical support is around 366, while resistance resides at 375. A breach above could lead to a gap fill above 380, and a drop below might test new lows at 347.
A straightforward pattern emerged on the daily chart, accurately outlining our recent actions. We issued alerts to our private club members to cover and adopt long positions as we approached and exceeded resistance. This approach aligns with our prior advice to “Be nimble.”
The negative slope of the 20-day moving average around 348 reflects the prevailing resistance across all indices. Although today’s rally resulted from a Short Squeeze, it’s unlikely we’ll see substantial upside percentage-wise until a downward trend resumes.
The VIX witnessed a 4.11% drop today, momentarily dipping below the 15 range.
SPY faces a pivotal resistance level, and whether the bears can hold this position will determine market dynamics. A breach could lead to bull dominance and further upward movement. If you’re bullish, remain cautious, as the bears might make a final push at this critical juncture. Profit locking remains essential; disciplined trading involves going long at support and shorting critical resistance. If you’ve reaped gains in recent days, now’s the time to secure those profits.
For those inclined to a bearish outlook, this is the moment to engage near resistance. Even in the event of a loss, a minor one is preferable when shorting at a critical risk level. To join us in navigating these market nuances, consider becoming a part of The G. Allan Collins Swing Trade Telegram Channel, equipped with my proprietary Dark Pool and Options Block Algo’s.
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G. Allan Collins