QQQQ, GOOG, and CSCO
First, let’s take a quick look at the Qs overlaid with one of the best indicators on earth- Dave Landry’s Big Blue Arrows (and if you want to laugh your butt off, here’s Dave and his Blue Arrows featuring his Top Analyst):
There’s no long-term trade here without a break out of this range, say above 45 or below 43, plus or minus.
Now let’s look at a couple of our most favoritest regular visitors, Boss Google and Boss Cisco. They’re important not only as potential trades, but also because of the effect they have on the NDX and consequently the overall market. They’re both at very crucial points where they need to get off their bee-hinds and show us some strength, or throw in the towel and slide on down the slippery slope. First, GOOG:
Nice, precise “to the penny” double-top action there. We failed out of that second top on big volume, and now the volume’s tapered off. Here’s a closer zoom:
A resumption of the downtrend tomorrow would be a perfect opportunity to move our stops down to today’s high 474.35, (since today’s high will then qualify as a minor pullback top). For someone not short, a resumption would be an opportunity to enter, set a nice tight stop, and join the rest of us shorties.
Google also has the option of breaking out to the upside, which will see many a pretty little 3-day swinger stopped out.
And Cisco. Oh, Cisco. How about that good news?
Stocks inched higher Wednesday after Wall Street welcomed a robust sales forecast from Cisco Systems Inc. and a stronger-than-expected productivity reading.
***
In corporate news, Cisco rose $1.07, or 3.9 percent, to $28.35 after the networking equipment maker predicted its third-quarter revenue would rise 19 to 20 percent.
from an AP article entitled Stocks Rise on Cisco, Productivity News and reprinted by virtually every news organization
So, Cisco rose 3.9 percent, eh? Close- to- close, yeah. But what does the chart say?
It opened way up, then pulled an OGRe (Opening Gap Reversal) and went down, down, down all day. The OGRe would have been a perfect point to get short (anytime a stock gaps way up and pulls an OGRe on you, it’s begging to be shorted). However, I must note that the failure of the OGRe happened at about 0934 at approx. 28.60, and most of us mere mortals like to let things shake out for 30 minutes or more, so it wasn’t that much of an opportunity.
Today could be the failed second top to that 1/11 “highest high.” Since we have a gap below it and it was such a high-volume bar, it’s a pretty straightforward trade: short a break of today’s low with a stop just above the big resistance at 29.00. We either make money or lose a buck. If we lose a buck, that means it’s broken to a new high, and that’s an opportunity to look for trades in the other direction. Sweet.