MM20: QQQ Broke the 200 Moving Average. Here is What I am Doing About It.

I want to take a moment to walk you through a few things I am looking at in the market right now. QQQ has broken the 200 moving average. It has broken support I have been referencing for the last month. And I know that feels scary.

But does that mean I am throwing in the towel? No.

Here is why. On our 4 hour IADSS chart, we have -2 mean reversion. We are starting to get the beginning of a ghosting buy signal. And when I go to the higher time frame, the 12 hour chart, we also have buy divergence. That is when price makes a lower low, but mean reversion makes a higher high. When you see these, they are powerful.

Now, here is the problem with the market as it stands. This correction feels like a dripping faucet. Every day you turn it on and a little bit of water falls out. I am not looking for a drip. I am looking for a flood. I am looking for capitulation. That moment where all the water pours out at once. We have not had that yet, so I am guarded.  

But guarded does not mean sitting on my hands. I am looking for opportunity. Not trades for today. Trades for my future self, three years out. Because this is where the money is made. It is made in bear markets. It is made in corrections. The market leaves you breadcrumbs. All you have to do is follow them.

The Synthetic Long I Placed in Circle (CRCL)

Let me show you exactly what I did in Circle today.

CRCL had a huge correction, found a nice double bottom (I love double bottoms), and started making its way back up. We are now in a nice, orderly pullback.