The QQQQs have definitely been leading the market up and a break above the very prominent October gap at $36 would be pretty incredible. That would be almost a 40% increase off of the lows in about 6-7 weeks. More importantly, this is the line in the sand when things really fell apart. SPY has the same gap but it is way up at $107. I don’t think the market will fill the gap, but that is where my stop is set on my QQQQ short. When I went through the main components earlier this week, it is hard for me to find where this surge from $35-43 would come from. Let’s remember, the economy might be out of total collapse mode on a short term basis, but we are still talking GDP contraction of -6%. Can AAPL really trade back towards its highs in this kind of environment?
For those that follow regularly, for a while I was following SPY/$SPX as my index of choice, then I moved onto XLI and DIA. I’m still watching SPY and its flirtation with breaking $88, but my index of choice is now QQQQ for the time being.
Breakouts on KWT and MOO today.
Keeping an eye on the bond funds. They are getting close to resistance. I don’t think the market can be considered healthy until the bond funds get back to their statistical mean. With interest rates being so low, they should actually be above their mean.
As far as my trades, I posted almost all of them to the blog during the day. The main theme is that I have continued unloading the junk. Today I cut HIG, LNC and NWL. I also trimmed MGM, CVI, PCX, BKD, HUN and LIZ.