(Click On Chart To Enlarge)
From Wednesday afternoon:
"The neckline is 26.83 and 26.93. If that gets broken, we should fill the 25.94 gap (or close to it), at a minimum. A breakdown would put a target of roughly 24.75 IN PLAY)."
The QLD strung out the H&S Top, putting in another Right Shoulder prior to breaking down (see intraday chart, posted on Thursday), but the "roughly 24.75" estimate for the measusred move target was pretty close: the low for the move came in on Friday morning at 24.86, within about one-third of 1% of target. Remember that targets are just "what we're aiming for," and rarely are exact. Friday morning, buyers were stepping in on the selloff, and shorts were covering, so we witnessed once again "buying on bad news:" the auto bailout failure, AND the $50 Billion Ponzi fiasco.
In the daily chart, the QLD still is above the channel breakout. This isn't the most bullish pattern in the world because all of the candles to the left, within the channel, represent nearby resistance. The QLD could rally to its declining 50DMA, currently at 30.133, and still be within the "possible" Bear Flag (pattern in red), the top of which comes in on Monday, December 15, at 30.315, then fail.
So, at the moment, I'm not excited about the long or the short side of the QLD and might play short-term patterns, as I did last week.
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