Descent Into Battle

The 30-minute QQQ chart, ETF for the top Nasdaq stocks shows, shows a clear descending triangle pattern highlighted in light blue.

After this morning’s rally, I am watching to see if $94 holds as firm support of the pattern into any afternoon weakness.

Bulls have had trouble holding rallies of late. So let’s see how this one plays out. I would look at a long or short trade here based on the directional break of the pattern, over $95 to the upside.

What are you trading today?

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Northern Oil and Gas caught an upgrade this morning and is up nicely. The daily chart, first below, shows a base breakout attempt. The second chart is a weekly which shows a potential long, base bottom.

Keep an eye on it over $18 to see if it can sustain a major breakout.

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A dramatic upside reversal in the futures overnight saw a green open this morning.

As I write this, the indices are mixed-to-slightly green.

GMCR may be a short setup here, especially if $118 now acts as resistance into bounces. Note the base breakdown potential on the first chart, below.

UA is a long setup, basing high and tight on the second daily chart, below.

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The following is just a small excerpt from my latest Weekly Strategy Session (please click on that hyperlink for details about trying it out). which I published for members and 12631 subscribers this past Sunday. 

It is still the same old story in a bull market: The negative divergences are ignored by buyers, even negated, for long stretches of time before they suddenly matter and matter in a major way. Of course, by the time the bearish divergences seem to matter, they are universally eschewed as being irrelevant, as they “no longer matter” in a one-way bull market. But nothing lasts forever, and the tide eventually turns. 

Thus, the overlooked micro-cap ETF chart, which we previously observed but remains off the radar of many market participants, is as much of a warning sign for equities as there is in a mature bull run.

On the daily and weekly timeframes, respectively, note the very ominous potential head and shoulder top not too far from confirming. A close below $68.80 again confirms this pattern, projecting a move down to around $61. This potential topping pattern is now in its eight month, making it even more ominous if it triggers since, “the bigger the top, the bigger the drop.”

And, of course, the regular small caps in the Russell 2000 Index are still weak. The daily and weekly timeframes, respectively, show a major double-top potentially also in play. A close below 1,082 is still necessary to trigger the pattern, projecting a move down to around 950. 

Furthermore…

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Here are some actionable short ideas on this list, especially if the market sees another day of weakness.

Courtesy of The PPT algorithm, here are some very aggressive ideas for short trades headed into Friday If you are not comfortable shorting (especially in a bull market), there is nothing wrong with taking a pass. Keep those cover-stops in place.

Nonetheless, a good chunk of readers are always looking for short ideas.

Members of The PPT can click here to view and save this “Titanic” Screen, as I named it when I created it a few years back. The screen isolates stocks vulnerable to further weakness.

Please click on image to enlarge 

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In the face of weak futures tonight, Citi is a short setup for Friday.

With a bear flag consolidation below a declining 200-day moving average, the massive bank is as ripe as any chart to reward bears pressing on a summer Friday.

On the long side, the usual suspects should do well with a market rally: FB NFLX PCLN TWTR.

Drop me your top tickers overnight.

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