QQQQ & FXI entries

Here we go folks. Let's first start off with QQQQ (the Nasdaq ETF). First check out the chart:

The QQQQ was leading the other markets (SPY, DIA, and IWM) in this last leg up, and in my opinion has the furthest to pull back. I could be wrong, but if I am, then this is a much better entry than the other markets as the price is closer to where I'd get out if I were wrong - i.e. a smaller loss.

I like 5 things about going bearish today:

1. The other markets are already pulling back - this should drag the QQQQs down.

2. Look at the sellers tail on today's candle - nice to know those sellers seem serious.

3. The volume is staying relatively even while trying to pullback.

4. The MACD histogram is rolling over lower.

5. The stoch divergence - blue circled stoch highs going lower as prices continued to go higher.

So, I'm looking for a quick trade here - maybe only 1 day, or maybe up to a week. I think we continue to go higher after this pullback, so I'm not looking to stay in this trade very long.

I'm looking for the QQQQs to go down around the next level of support below our current level of support right now. We're basically sitting on a level of support and we need to break this (preferably with volume) level in order to go lower. We might not get all the way down to the next level on a pullback, but we'll closely watch the charts and let them tell us when to get out.

If we take a loss, it'll be above the sellers tails on the candles over the last few days. I want to make sure if I take a loss that the buyers overpower the sellers up at those prices, because as of recently those sellers are just sitting up there ready to pounce.

I bought a November 51 Put for $3.07.

That's it for QQQQ, now let's check out today's 2nd trade.

Onto FXI, here's the chart:

So, let's start at the beginning - the overall markets. As mentioned earlier the overall markets are all coming down after being overbought. It's time for the sellers to push back the bulls a bit before the bulls continue higher.

I got into FXI for the following reasons:

1. You just GOTTA LOVE that divergence in the stochs. Look at that, 3 tops all going lower as prices went higher.

2. Look at the last divergence in the middle of the chart - deja' vu. See what happened after the divergence? A nice drop in the price.

3. I like those sellers tails on the candles from the last few days.

4. Volume is dropping a little, but not much, so nothing really to worry about there.

5. MACD histogram and black line are both turning down.

This will also be a quick trade. Possibly 1 day or up to a week. I'm looking for price to go down and hit that level of support. A couple of other items line up nicely with that level of support: 1) the 50 day moving average is just under it, and 2) There's a gap from a couple of weeks ago that may get filled.

For this trade I bought the November 44 puts for $2.96. If price goes back up above all those seller's tails, then I'll get out and take a loss.

So, for both these trades, I'm going to just watch these two every day for signs of the bulls coming back into power. Once I see the bulls coming back, then I'll get out of the trades.

I'm looking to make a fast nice profit on both these. Game on.