Tough to Invent a Better Setup

If you are looking for a clean bearish setup, not even Thomas Edison (colorized pictured above, enjoying a vacation) could invent one like we have on the QQQ 30-minute chart, below. 

But therein lies the rub. 

For years now, those "textbook" bearish setups seemed too obvious to work, as many theories float about how markets have changed and the HFT bots are programmed to take advantage of these patterns. Be that as it may, plenty of other patterns have worked, silencing those critics. 

On this zoomed-out 30-minute chart for the top Nasdaq stocks' ETF, price plunged below prior $131.50 support this morning, losing a place where buyers had previously made a stand. 

As has been the case in this market for a while, though, buyers fought back for a considerable late-morning bounce. That bounce brings the Nasdaq back up to the scene of this morning's breakdown, giving sellers another chance to press for a late-afternoon rollover, if that can hold onto the initiative this time around. 

I am not leaning too heavily short at this point, with the heart of earnings season coming up and plenty of longs holding up well. Moreover, the strength in gold and her miners has piqued my interest more than loading up on equity shorts. 

Still, with the VIX futures' board backward it would behoove bears to make hay while the sun shines with these types of setups.

More in my usual Midday Video for Members.