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MACD’s Prefiguration
[Daily Chart of POWERSHARES QQQ TRUST]
As you can see, in this chart above with prefiguration of the MACD that, this might the level where the buyers start to prepare for their run-up again, historically speaking. Because as of today, we have insufficient data to confirm that hypothesis but looking at the above chart, MACD does not pass below this level exception of the market-crash back in 2008. Even then (back in 2008), we first saw a bounce at this MACD level and then it formed that lower-high in the price action before the ‘tankage’ occurred while the MACD getting much lower. If you actually expand this chart to 2002, 2008 was the only time where MACD had gotten below this level (see horizontal red dotted-line). So last 12 years, MACD was able to pass below this level only once? I guess my thought is, at this point, what are the probabilities that the MACD gets much lower from this point on?
So historically and probability-wise, I think this could be the important level for the buyers to potentially start to show up. Also 200SMA vicinity has been served as strong support since 2009 and that could supplement the argument here. Maybe next 2-3 days might be the key.
3 thoughts on “$QQQ $COMPQ NASDAQ Composite Index and the Buyers Preparation”
Looking at the MACD chart, It would seem to be safer to wait until it crosses 0 after getting down near the dotted red line; this seems to work about as well in most cases and it avoids much of the pain in 2008.
markuzick right it does for long-term perspective but many times what happens is, by the time when MACD crosses “0”, the price does tends to fall back if you study it closely~
2kaykim markuzick I think what’s more important is the pattern itself or historical comparison rather than signal line cross/specific number, because MACD will give you different pictures if you use a different setting: (8,17,9) or (10,50,9) will look quite different than the standard setting of (12,26,9). Weekly&Monthly MACD still look bearish. We could see a meaningful bounce on prices, or we could also see a small bounce in a range with time lapse, while MACD goes up.