Regarding our QQQQ July trade, available to members: we are watching this trade closely and will exit it without hesitation if we do not get a move back down today or tomorrow.  This was a small-sized diversification move, so nobody should have a full position allocation in this trade.

The Nasdaq continues to make new highs and has shown real leadership lately, and we have little doubt that it will go still higher at some point.  But the recent highs have been made on increasingly low volume, and the Relative Strength reading on the daily chart is maxed out, so a very small move downward can be expected for technical reasons.

Additionally, earnings season has begun, and there is some significant economic data coming later in the week, so any unpleasant news from those areas could drive the indexes lower.

We will be opening our August trades very soon, and exiting our July positions in the next few days.

[UPDATE:] Markets are set to open lower on some inflation and housing worries, and the QQQQ and SPY already look set to open below yesterday’s lows.  Ever the contrarians, that’s good for us!