NASDAQ / QQQ / NQ - Market exhaustion to present buy opportunity

2018年7月19日

QQQ has been looking stretched as of recently which is being emphasized by the fact that it hasn't been able to push higher in the past few trading sessions. Any move lower could put a quick squeeze on retail long traders and quickly push price back down to the 171-170 region. If this happens I am looking to be a buyer on that weakness as the short/medium/long term market structure is solidly bullish right now. I have been slightly short the NASDAQ which has been paying off the last few days, and will switch my short positioning to long once the QQQ's break below 175 and continue to get long if they continue to drop. This type of trading does not use specific price action candlestick setups, but is rather simply buying into the bullish structure on any weakness, and buying near areas of critical support. In these types of trades it may be a good idea to fade, which means you take "small bites" as price drops, and continue to buy as long as price is dropping, rather than going "all in" at a single price point.

If a bullish price action candlestick signal forms in the 175-170 area, such as a bullish pin bar, engulfing bar, 2 bar reversal, then I would get even more bullish and increase my long position.