Tuesday, December 16, 2008

Was today's breakout real or artificial?

The QQQQ broke through downtrending resistance today that it has been bouncing off since 12/8.
However...

Although volume was higher than yesterday, it was not up to the 30 day moving average let alone breaking resistance with high volume.

Today the Fed dropped the interest rate to a new low. Did that cause the up swing in the market? Very possible.

An uptrending resistance line can be draw from 11/20 through today's low. Until today, that could have been a mini-trend within the larger channel down trend.

But was today's breakout real or artificial? I'm not sure. We are also close to hitting the horizontal resistance of the prior 5-yr low. I'm still undecided if I want to wait to see what it does against that or look to place bearish trades as it nears it. So while I think about this, I have no trades entered for tomorrow.

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