QQQ dominated by bears dragging the market lower throughout the day
PowerShares QQQ ETF (QQQ) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
QQQ finished Wednesday at 274.61 losing $4.45 (-1.59%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 275.13, the ETF confirmed its breakout through the previous session low after trading up to $0.87 below it intraday.
Daily Candlestick Chart (QQQ as at Sep 16, 2020):
Wednesday's trading range has been $6.10 (2.18%), that's slightly below the last trading month's daily average range of $6.58. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for QQQ.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical resistance level at 280.45 (R1). After having been unable to move lower than 275.13 in the prior session, the market found buyers again around the same price level today at 274.26. The last time this happened on August 6th, QQQ actually lost -1.15% on the following trading day.
Although QQQ is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could accelerate should prices move above the close-by swing high at 280.45 where further buy stops might get triggered. Further selling could move prices lower should the market test August's nearby low at 264.63.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Close near low of period" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for QQQ. Out of 415 times, QQQ closed higher 57.83% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 66.51% with an average market move of 1.25%.