The fact that the Q's (QQQQ) pressed exactly to the April-May support line, held, and then reversed strongly is an indication that perhaps a minor correction already had run its course since last Friday’s high. Furthermore, the pattern carved out from last Friday’s high into this morning’s low exhibits classic pullback form, rather than form that would argue that a larger decline was or is developing. These factors compelled me to exit the short position, looking for a retest of the 47.00 area in the upcoming hours – perhaps in reaction to CSCO’s earnings later today.



Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.