This Trigger Could See the Nasdaq Rally Burst

[Trading With Larry Benedict]( This Trigger Could See the Nasdaq Rally Burst By Larry Benedict, editor, Trading With Larry Benedict The performance of the Nasdaq these last few weeks has been extraordinary. From its October 26 low, the Invesco QQQ Trust Series 1 (QQQ) has gained around 13%. That’s more than the average buy-and-hold investor would expect in a year. QQQ’s recent snap higher also puts it up nearly 50% since its January low. It’s hard right now to imagine what could stop this runaway train. But as traders, we always need to be on the lookout for the next move. So let’s check on QQQ to see what’s coming next… Recommended Link [How AI Could Save the EV Industry & Mint More Millionaires Than Tesla Stock]( [image]( 20 years of flawless sailing conditions… Plus, an army of politicians propping up the industry on tax credits… And America’s electric vehicle makers STILL can’t figure it out! The “state of the industry” is almost laughable: - 80,000 Americans are patiently awaiting their electric Hummers — GM has delivered just TWO all year! - Top-of-the-line EV models use a 1980’s battery technology so outdated — it’s like duct taping 5,000 Energizer AAs under a car. - $60,000 sticker prices have The Wall Street Journal reporting ABYSMAL sales as “car companies are finding a limited pool of consumers willing to pay.” [But now, one company using AI promises to unleash a new era of affordable EVs in America…]( And mint more new millionaires than the rise of Tesla. I call this firm’s solution The “EV Master Key.” [Click here for the full video presentation]( -- Potential Bounce On the chart below, you can see that QQQ has rallied strongly since the start of the year. It saw a brief pullback from February into March. But then QQQ’s rally resumed, and it climbed through July: Invesco QQQ Trust Series 1 (QQQ) [Image] Source: eSignal QQQ’s near-seven-month rally corresponded to two common bullish signals: - The relative strength index (RSI) broke into its upper band, where it remained throughout QQQ’s rally. - Back in January, the 50-day moving average (MA, blue line) crossed above the 10-day MA (red line). The 50-day MA continued to track above it with both MAs trending higher. Yet a momentum reversal caused QQQ to eventually peak and reverse on July 19 at “A.” From there, QQQ made successive lower highs at “B” and “C” as momentum (RSI) continued to wane. This period also saw the 50-day MA roll over, signaling that QQQ’s uptrend had come to an end. We last [checked out QQQ]( October 24 (red arrow). At that time, the bottom half of the RSI chart caught our attention. Leading up to the “B” and “C” rallies, the RSI formed a “V” and rose from near-oversold territory (two left orange circles). Take another look: Invesco QQQ Trust Series 1 (QQQ) [Image] Source: eSignal With the RSI falling, we were looking for another potential bounce. And as the chart now shows, we saw that RSI pattern repeat yet again (right orange circle). But unlike the previous rallies, this current rally has continued to surge. And QQQ is now trading within a whisker of its year-to-date high back on July 19. So what potential triggers am I looking for? Free Trading Resources Have you checked out Larry's free trading resources on his website? It contains a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. Panic Buying In a typical rally, you’ll often see several up days (four or five) followed by a day or so of down days. But in QQQ’s current rally, there have been just two down days since it bottomed out back on October 26. This kind of pattern is highly unusual. It’s like the market got caught up in a wave of panic buying. But that kind of crazy buying eventually peters out… That means the market is vulnerable to a pullback. And that’s where momentum (RSI) will be key. As you can see, the RSI is closing in on overbought territory. From here, I’ll be looking for the RSI to make a clear reversal (inverse “V”). That will show us that QQQ’s rally has come to an end. Regards, Larry Benedict Editor, Trading With Larry Benedict Mailbag Readers at The Opportunistic Trader are reaping the benefits of our trades: Hello Larry, Our first BITO trade was like winning lotto!!! One contract, a nice profit, can't wait for the next trade, thank you. We will compound these profits to build our account for further profitable trades. We really appreciate and look forward to receiving your regular reports on the market. Many Thanks. – Carol W. 41% profit in 50 contracts or $7.2k! Beautiful Larry! Keep it coming! – David M. 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