With the put/call ratio at 1.18 and the index indicators very oversold, a bounce is likely today. I went to cash early Thursday in my trading accounts. The GMI and the QQQ short term trend indicator will likely turn red/down by Friday’s close. The tone of the market has changed and there are a lot of reasons for me to retreat to the sidelines. If the QQQ bounces and then turns down, I might buy some SQQQ to profit from its decline. The QQQ might return to the resistance level in this chart represented by the horizontal trend line I drew in. The QQQ is resting on its daily 15.2 lower Bollinger Band. Note the recent red volume spikes and that the QQQ has closed down on 7 of the last 8 days. A close below the 150 day average (lowest dotted line) would suggest to me that a major down-trend is on the horizon.
