Qs Weekly Update

Above is the 3 LRs study (30,11,3) of the daly, weekly monthly bars and once again the Qs are showing some time divergences and indicator conflicts. The daily chart is negative, having lost the LR11 upslope and now trending down in sync with the technicals. First level of support is 43.75, while a retracement to the LR30 mean would take the Qs to 42.50. These are just some targets to keep in the back of your mind. The Weekly chart is all negative. . .a reversion to the LR11 mean would take the Qs. . .a lot lower. The monthly chart is ambiguous. . .the Qs are at the bottom of the LR30 channel and the technical are negative except for the RSI which has turned up from oversold conditions. This is the monthly chart however, and a lot can happen in the next 18 days. If we get a solid break of lower LR30 channel support at 42.00, then, things could get dicey.

Above is the little pivot high, pivot low daily chart of the Qs in TradeStation. Although it is clearly a lookback indicator, I use this to help determine likely next days trends. Since I'm a very short term trader (seldom more than 120 minutes), I've crunched the settings to (2,1) as I'm basically trying to detect 3 day swing patterns. This is a Show Me study, (magenta and turquoise dots) in TS version TS200i. The buy/sell signals are a product of an RSI based Qs trading strategery that has over an 80% success rate, and used with a trailing stop, has only modest drawdowns. Since my ultimate goal after 20 years of trading is to develop a mechanical trading system that yields a consistently rising equity curve with low drawdown, this is a work in progress (for the last 9 years). Hey! . . I'm a slow learner.

The system generated a BUY midday Friday and despite my aversion to late Friday trades (mentioned on several previous posts), I went long a small position 10 minutes before the close. Monday could see follow through selling and so I'm prepared to cut and run if that scenario pops up.

A chart of historical volatility above shows the Qs remain at elevated levels on declining volume.

The A50 has now retraced to the 200DSMA in sync with our mean reversion model. Our current expectation is that further declines are likely to follow, with the 50DSMA providing the first line of support.

A similar story with the A200, although with the early April rally, we are seeing more of a consolidation pattern, so few clues as to impending momentum. If the Qs do start another slide, the 20DSMA will quickly turn downslope and the A200 will chase it down.

The weekly update provides a few different technical views of the Qs that may help guide your own trading analysis. With earnings season in gear anything can happen (a la GE) and with INTC reporting on Tuesday, we could see some real volatility swings.

As always, caution is advised.