The market entered last week on uncertain footing, then reached an important crossroads following the Federal Reserve announcement. Friday was conviction day – and the generals, represented by the Invesco QQQ Trust (QQQ), continued to lead the advance, counsels Buff Dormeier, chief technical analyst at Kingsview Partners.
After an initial positive reaction early Wednesday, the S&P 500 Index (^SPX) reversed lower, tested and kissed intermediate support near 7,500, then held the line. The follow-through was notable the next day. Thursday opened with a strong upside gap and finished as a 95% Capital Weighted Dollar Volume inflow day on typical volume.
Invesco QQQ Trust (QQQ)
As for the QQQ, after testing 700 support earlier in the week, it closed on its weekly high near 721. That level is important because it sits near the upper end of the late August trading coil, with roughly 721 resistance and 700 support.
The volume picture within this coil has become more constructive. The generals are not yet in open field, but they have stopped retreating and are attempting to reassert command.
If volume and capital flows continue to improve while breadth stabilizes, the bulls may regain stronger control. If breadth deteriorates further or support fails, defensive positioning could take priority.
For now, the generals are attempting to lead again, but the broader army has not fully followed. The decision candle near 7,657 now marks the battlefield.
