Context is King

Since the violent but trend-less price action in the broad market since a sharp sell-off in August, it is more important than ever to focus on staying objective and putting all theses about where the market goes from here into context. Indeed, staying out of trouble in a market climate where huge drawdowns are now the rule for traders, rather than the exception, is a basic tenet for Members we have been repeating on a daily basis. 

With this in mind, putting today's rally after yesterday afternoon's upside reversal in stocks into context is critical. 

On the zoomed-out 30-minute chart of the QQQ, ETF for the leading, glamorous issues in the Nasdaq-100, note the upside breakout of the light blue lines, denoting the falling channel price settled into after the post-FOMC downside reversal two Thursdays ago. 

Another thrust over $105 adds credence to a bull case for another leg higher in a short-term rally. But failure to hold over this channel would be rather bearish indicating plenty of buying power has been used to no avail.