QQQ came within $1.11 of filling its island reversal gap from August 4th. We now have 7 bearish days in a row on QQQ, and it looks like all eyes are going to be on NVDA and the Fed.
Once again, those two juggernauts could decide the fate of the market.
NVDA earnings are Wednesday, and if we see a disappointment, it could drag the entire market lower. NVDA earnings have not been all that exciting for the bulls for quite some time, and I am concerned this time could be no different.
Then on Friday, Kevin Warsh will speak at Jackson Hole. His comments could have a meaningful impact on the market, especially with the anxiety we have been seeing around the bond market lately.
All in all, this week is unlikely to disappoint anyone looking for an uptick in volatility.
NVDA Daily Chart
QQQ and the Seven Bears
I mentioned above that QQQ has now printed 7 bearish days in a row. In the video above, I go through every time this has happened over the past decade and look at what happened on the 8th candle.
There have only been 5 instances, and every single time, the result was either a durable low or we were only a few days away from one.
If QQQ simply cascades lower from here, we would be a major outlier. That gives me one more reason to look for a bullish setup from this area.
The risk-to-reward is attractive, especially at the 100-day SMA. We have roughly 10% upside to a new all-time and the $770 fib level versus about 1-2% downside using a break below the 100-day SMA as the stop.
QQQ Daily Chart
The 2020 Seven Bears example is particularly interesting.
We saw a massive run higher in 2020, similar to what we have seen in 2026, followed by a consolidation and another steep push higher that failed to make a new high. That was followed by the 7-bearish-candle pattern we are seeing now.
In 2020, QQQ did in fact break down and dropped into the 100-day SMA, which was just below price at the time, very similar to what we are currently seeing.
I am not saying history has to repeat, but the setup is interesting enough that I want some exposure.
Check out the video above for a deeper dive into QQQ, Bitcoin, HOOD, and more.
QQQ Daily Chart 2020
