Following up from my previous article explaining how the central banks have intervened every time the QQQ game over moving averages have merged and threatened to down cross, we saw a valiant effort take place during the second half of last week to intervene once more as Yellen retreated her hawkish stance mid week and the BOJ eased. It was everything they always do but this time it was not enough.
Early Friday afternoon we saw the tip of the red moving average on the daily chart begin to show under the larger green moving average and a QQQ / NASDAQ 100 bloodbath ensued in the last few trading hours. This marks the starting point. However, it must also show up in the equivalent moving averages in the weekly bars chart to provide confirmation of the down cross. With today's open, the red moving average did appear under the green on the weekly chart for confirmation that the QQQ seven year run is game over, the last of the indices to break down. I have blue arrows pointing to the emerging down cross that began midday Friday in the charts below.
click on image to enlarge
While as of this posting, a little over an hour before the closing bell, the market is near the lows of the day the pattern has been to jam the market back up the next day usually fifty to sixty-two percent of a bloodbath day's loss to break up the selling and sometimes they can get a couple of days short squeeze to keep investors from totally freaking out. Nonetheless, the down cross has happened and confirmed and it would take nothing less than a shock and awe event to pull the tip of the red moving average back up to the green, such as an emergency Fed removal of the quarter point rate hike. Even that, however, might not be enough to undo the damage of this historic marker.
Trade well my friends