Top Pick Performance
Cash was the only position which worked yesterday. Although QQQ broke down and headed towards our swing targets noted in yesterday’s macro discussion, short QQQ was not an official top pick yesterday.
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Macro Discussion
Yesterday we warned that the “daily chart in QQQ still looked dangerous with possible downside over the next few weeks to $635 to $665”, despite the large gap up open. However, we thought the Iran pause might delay the breakdown until after FOMC or key earnings reports later this week.
Well, Christmas came early for convicted shorts who stuck with our negative outlook as QQQ dropped 1.5% from the open and now appears headed straight for the first key support at $665.
QQQ is already under pressure again this morning taking its lead from the Korean Kospi index which was down 10% overnight.
The key tech heavy index now seems destined to reach the $635 to $665 support range regardless of what happens with these three major events on the horizon:
1. FOMC interest rate decision this Wednesday
2. MSFT META AMZN and APPL earnings reports this Wednesday and Thursday
3. Future developments with the Iran war and the price of oil
As such, we are downgrading to red alert.
Today’s Signal: 🔴
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