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The Power of the Wave Principle

NASDAQ ETF QQQ

Stock-Markets / Stock Index Trading Mar 29, 2016 - 07:00 PM GMT

By: Ed_Carlson

Stock-Markets

We have been expecting a top in equity indices for the last two weeks. We did see the market start down last week after the previous Friday's option expiration. A change of trend after option expiration is a common (but not guaranteed) occurrence. So far the pullback isn't enough to concern the bulls or get the bears excited but there are other signals warning of a pending correction in equities. One of those is volume in the NASDAQ ETF QQQ.


As can be seen on the chart below, QQQ volume tends to spike at market lows and dry up near market highs. Volume spikes can be explained by market participants buying the ETF in order to hedge their stock positions. The complacency associated with a lack of hedging activity shows in low volume numbers - like now.

Try a "sneak-peek " this month at Seattle Technical Advisors.com

Ed Carlson, author of George Lindsay and the Art of Technical Analysis, and his new book, George Lindsay's An Aid to Timing is an independent trader, consultant, and Chartered Market Technician (CMT) based in Seattle. Carlson manages the website Seattle Technical Advisors.com, where he publishes daily and weekly commentary. He spent twenty years as a stockbroker and holds an M.B.A. from Wichita State University.

© 2016 Copyright Ed Carlson - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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