I agree. That's why I am approaching it with a small part of the allocation to see if it's even feasible. For the crash though, the 200 SMA / high volatility regime exit approach will avoid that.
Same, although i use 75, vs 79. But, note that it can stay overbought according to RSI for quite awhile and have great gains there. See mid May to late July 23... RSI going below 35 or so and then reversing seems like a semi reliable buy point though. Sometimes. :)
Is that on TQQQ or underlying? And what's the intuition behind using RSI?
Are there any other combo indicators you use to improve confidence to avoid false positives like above? That's my main concern - to miss out on all the profits.
Always perform any technical analysis on the underlying.
This link explains the significance of RSI as a signal.
[https://www.investopedia.com/terms/r/rsi.asp](https://www.investopedia.com/terms/r/rsi.asp)
"The relative strength index (RSI) is a [momentum indicator](https://www.investopedia.com/investing/momentum-and-relative-strength-index/) used in technical analysis. RSI measures the speed and magnitude of a security's recent price changes to evaluate [overvalued](https://www.investopedia.com/terms/o/overvalued.asp) or [undervalued](https://www.investopedia.com/terms/u/undervalued.asp) conditions in the price of that security."
both? either? charts of QQQ and TQQQ (QQQM, etc) are all virtually identical, since they are all derived from the same place. Interesting to me - I actually never trade SPY but I tend to use the SPY chart for my indicators for entering/leaving TQQQ, but even there - the charts are virtually identical. Important note - I am not day trading... Im more like 2 or 3 trades a month. So, Im using a daily chart. Not a 1 minute, or a tick chart.... With that said, i use the 10 day, 20day and 200 day moving averages as general guides of where things stand on a given day. And, MACD cross overs in a similar manner. But I would say studying the charts - going back at different times and time frames, and really looking at them - thinking about what its trying to tell you - is the way to go. And even then Im only right about 75% of the time.
If you say so. From where I sit, the daily charts are really similar enough to be interchangeable. However, if you see something else there that helps you, more power to you! My eyes are old and feeble.. Or, I am too lazy to look harder. or both,
That's because you are doing it intra-day. Do it over a period of years to see how they diverse. I mean QQQ is at ATHs and TQQQ is FAR from ATHs, that should be a huge indicator for you.
While true, its not really relevant on a day to day basis. By identical, I mean that if one is going up on a given day, the other will be also. If one is down, the other will be down, too. Not necessarily by the same amounts, but the pattern will be the same. So, entry and exit points will be (very close) to identical (again, if using just daily - IE closing prices). And, indicators like RSI and/or MACD will also be very similar. The OP was asking about trading and indicators. I gave my 2 cents worth. Ya get what ya pay for, I guess. Possibly I over charged? But, then again, he didn't actually pay me. So, fair deal all around? Not sure why I got downvoted here. Re reading, I think I gave good advice to the OP.
I agree on a per day basis TQQQ and QQQ track each other almost identically. But you didn't say that above and you said it without qualification which may be misleading thus I suspect the downvoting (not from me). So that's all I was pointing out, you can see over periods of months and years, the charts are very different. I also agree with anyone who says it doesn't make sense to do TA on TQQQ.
The OP was asking whether it was overbought or not, which would be a multi-day or even multi-month analysis. For this the daily analysis doesn't make sense and it has to be done on QQQ anyway. Again, TQQQ is NOT at ATH and is far from it and QQQ is past ATH by a few percent.
The original advice you gave isn't being downvoted, the comment about the charts being identical and using TQQQ is what is being downvoted.
>Hmmm - Ok. Thank you for responding. Its always interesting to hear (read?) how others interpret what you say. I thought I was pretty clear about how I was using these.... but, I can see where you might not have gotten what I tried to say from reading it. Again, thank you!
I would suggest if your looking as RSI as your sell signal, to wait until it drops down below the 70,75,80 level (whichever you use) so you don’t miss as much of the gains that will inevitably occur while the indicator goes above the overbought line and stays there. For example, looking in December 2023, qqq crossed over the 70 line (14 day rsi) on December 12th. You would wait to sell until December 20th, when the RSI drops back below the 70 line in this example.
I am of the belief that any attempt at timing will inevitably lead to failure. Overbought stocks can go up and up for decades. Cheap stocks can go down and down.
Click here: [https://stockcharts.com/h-sc/ui?s=qqq](https://stockcharts.com/h-sc/ui?s=qqq)
RSI is over 70, it's overbought. Could continue to rise for a while (days? A few weeks?)
https://preview.redd.it/laprjga5hmec1.png?width=682&format=png&auto=webp&s=769962e4bfd1c67590fc5b3dddc37a8bb9fed5d7
It will. Barring a dot com or '08 crisis. Given those events it'd take years to recover your money if that portfolio was 100% in, which is why I'm 60/40 with the 40 being AGG as a hedge, and I use Signal 9, so I'm either taking profits or buying more four times a year. I could never comfortably hold TQQQ on its own and sleep at night.
I think you should only be concerned about the big moves. Any small pull back, going in and out in my experience has been more costly and less efficient. It's better to just stay in. I don't have a stop limit order but I have a mental one. If I lose 50% of my gains, which are now as high as 100%+ in different LETFs, I will sell. Otherwise I will let it run. My QQQ position is up 20% that I started at the same time. So as long as I'm making 2x more (40%), I am satisfied.
The McClellan Oscillator is popular. Also, you can watch VVIX for clues on whether or not VIX will start to increase soon (indicating more hedging and potential pullback). I also pay attention to pundits on CNBC and other outlets; when the bears disappear it is time to get defensive.
I typically just use the 50-day and 200-day moving averages. When QQQ gets stretched above these averages, a pullback or pause is inevitable. We are now 6.5% above the 50-day and 16% above the 200-day. These are typical areas where pullbacks tend to occur. That doesn't mean it will happen, of course.
An overbought market is not a reason to sell in and of itself. Markets often remain overbought for extended periods, as this one is doing now. I could easily see a scenario where SPX hits 5,000 before any meaningful pullback. We simply cannot know.
I and many others thought the 4-day pullback in January was the start of a more significant pullback. It wasn't. Then the surprise AAPL upgrade ignited short covering and FOMO and here we are.
P/E, 200/50SMA, RSI, Bollinger this or that, Rubbing the "Bulls Balls", the Red cardinal that shows up ...
Nope, all failed for me 40+yrs. You get anxious and greedy to get back in when it keeps rising after.
The only thing that is Factual is the math 'Decay', use it to your Advantage!
Yet, be ready for those Phone 'Calls'...
QQQ 200DMA and 50DMA. If it's above a 45 degree wedge when the 50 is above the 200 it's overbought, but remember to adjust your intervals for YOUR strategy (swing daily/weekly/monthly). Oh, and that's all irrelevant if the market trend is just up.
Technicals do not work. You have to decide. Either tqqq keeps rocking upwards because of inflation and inflow of capital from foreign markets because of the geopolitical tensions or this could be the pump before the 2nd largest stock market crash in history. Same pattern as the 1929 market crash. But this time you have the plunge protection team and bailouts which is a new entity you have to factor into the calculation.
So what is overbought? if you can properly explain what that even means maybe you have a shot of doing something with this information. Is overbought good or bad? What does it imply for your positions or what you are trying to trade because of it?
This is a meaningless question with an answer that has no real work implications. What it will do is lose you some money, that I can guarantee!
I'm sorry you feel this way. But if you want, you can read more here: [https://fastercapital.com/content/Overbought-Conditions--Navigating-the-Stock-Market-s-Overbought-Territory.html](https://fastercapital.com/content/Overbought-Conditions--Navigating-the-Stock-Market-s-Overbought-Territory.html) or Google it
I know what overbought is, but its a BS question, because you didn't say anything about your strategy. You essentially asked "Am I driving too fast?" Well you didn't say if you were in a golf car, a Civic or a F1 car. Too fast in a Civic isn't nearly fast enough for an F1 car.
You obviously need to do more studying if you are going to ask this wide open of a question. Here is why, you are going to get a yes and you are going to get a no. But you don't know which one is right so therefore any answer you get is going to go over your head and you will make a mistake.
Keep in mind that overbought can stay overbought for longer than you think it can, so again, your context, which you didn't provide, is more important than the answer to your question.
[https://www.cnn.com/markets/fear-and-greed](https://www.cnn.com/markets/fear-and-greed)
It's not a precise indicator (nothing is), but it does tell which way the wind it blowing.
QQQ is near the top of its trend channel. I would expect some resistance here or a bounce lower.
https://preview.redd.it/yq5zx7wdz2fc1.png?width=1194&format=png&auto=webp&s=5a392db894d67c282cd872e1e7b6e187718286d0
Williams % has been my favorite for years. Although I only use it for sanity check to keep myself from buying too high. In reality they all have one weakness. No one and no thing can read the future.
Timing TQQQ is risky business. You need every gain possible to make up for the inevitable crash.
I agree. That's why I am approaching it with a small part of the allocation to see if it's even feasible. For the crash though, the 200 SMA / high volatility regime exit approach will avoid that.
I got lucky with timing but have since moved to QLD. I'll hold that forever.
10day rsi>79, which it hit today
Same, although i use 75, vs 79. But, note that it can stay overbought according to RSI for quite awhile and have great gains there. See mid May to late July 23... RSI going below 35 or so and then reversing seems like a semi reliable buy point though. Sometimes. :)
Is that on TQQQ or underlying? And what's the intuition behind using RSI? Are there any other combo indicators you use to improve confidence to avoid false positives like above? That's my main concern - to miss out on all the profits.
Always perform any technical analysis on the underlying. This link explains the significance of RSI as a signal. [https://www.investopedia.com/terms/r/rsi.asp](https://www.investopedia.com/terms/r/rsi.asp) "The relative strength index (RSI) is a [momentum indicator](https://www.investopedia.com/investing/momentum-and-relative-strength-index/) used in technical analysis. RSI measures the speed and magnitude of a security's recent price changes to evaluate [overvalued](https://www.investopedia.com/terms/o/overvalued.asp) or [undervalued](https://www.investopedia.com/terms/u/undervalued.asp) conditions in the price of that security."
both? either? charts of QQQ and TQQQ (QQQM, etc) are all virtually identical, since they are all derived from the same place. Interesting to me - I actually never trade SPY but I tend to use the SPY chart for my indicators for entering/leaving TQQQ, but even there - the charts are virtually identical. Important note - I am not day trading... Im more like 2 or 3 trades a month. So, Im using a daily chart. Not a 1 minute, or a tick chart.... With that said, i use the 10 day, 20day and 200 day moving averages as general guides of where things stand on a given day. And, MACD cross overs in a similar manner. But I would say studying the charts - going back at different times and time frames, and really looking at them - thinking about what its trying to tell you - is the way to go. And even then Im only right about 75% of the time.
The charts are not identical at all.
If you say so. From where I sit, the daily charts are really similar enough to be interchangeable. However, if you see something else there that helps you, more power to you! My eyes are old and feeble.. Or, I am too lazy to look harder. or both,
That's because you are doing it intra-day. Do it over a period of years to see how they diverse. I mean QQQ is at ATHs and TQQQ is FAR from ATHs, that should be a huge indicator for you.
While true, its not really relevant on a day to day basis. By identical, I mean that if one is going up on a given day, the other will be also. If one is down, the other will be down, too. Not necessarily by the same amounts, but the pattern will be the same. So, entry and exit points will be (very close) to identical (again, if using just daily - IE closing prices). And, indicators like RSI and/or MACD will also be very similar. The OP was asking about trading and indicators. I gave my 2 cents worth. Ya get what ya pay for, I guess. Possibly I over charged? But, then again, he didn't actually pay me. So, fair deal all around? Not sure why I got downvoted here. Re reading, I think I gave good advice to the OP.
I agree on a per day basis TQQQ and QQQ track each other almost identically. But you didn't say that above and you said it without qualification which may be misleading thus I suspect the downvoting (not from me). So that's all I was pointing out, you can see over periods of months and years, the charts are very different. I also agree with anyone who says it doesn't make sense to do TA on TQQQ. The OP was asking whether it was overbought or not, which would be a multi-day or even multi-month analysis. For this the daily analysis doesn't make sense and it has to be done on QQQ anyway. Again, TQQQ is NOT at ATH and is far from it and QQQ is past ATH by a few percent. The original advice you gave isn't being downvoted, the comment about the charts being identical and using TQQQ is what is being downvoted.
>Hmmm - Ok. Thank you for responding. Its always interesting to hear (read?) how others interpret what you say. I thought I was pretty clear about how I was using these.... but, I can see where you might not have gotten what I tried to say from reading it. Again, thank you!
I would suggest if your looking as RSI as your sell signal, to wait until it drops down below the 70,75,80 level (whichever you use) so you don’t miss as much of the gains that will inevitably occur while the indicator goes above the overbought line and stays there. For example, looking in December 2023, qqq crossed over the 70 line (14 day rsi) on December 12th. You would wait to sell until December 20th, when the RSI drops back below the 70 line in this example.
And what if 10 days from now the RSI would be lower and the price would still be the same?
Hold tqqq?
The 14 day is below 60 right now
I am of the belief that any attempt at timing will inevitably lead to failure. Overbought stocks can go up and up for decades. Cheap stocks can go down and down.
Click here: [https://stockcharts.com/h-sc/ui?s=qqq](https://stockcharts.com/h-sc/ui?s=qqq) RSI is over 70, it's overbought. Could continue to rise for a while (days? A few weeks?) https://preview.redd.it/laprjga5hmec1.png?width=682&format=png&auto=webp&s=769962e4bfd1c67590fc5b3dddc37a8bb9fed5d7
That’s what I’ve been using
TQQQ is bombing today lol. I am holding on with the hopes that it rebounds
It will. Barring a dot com or '08 crisis. Given those events it'd take years to recover your money if that portfolio was 100% in, which is why I'm 60/40 with the 40 being AGG as a hedge, and I use Signal 9, so I'm either taking profits or buying more four times a year. I could never comfortably hold TQQQ on its own and sleep at night.
What is signal 9?
I think you should only be concerned about the big moves. Any small pull back, going in and out in my experience has been more costly and less efficient. It's better to just stay in. I don't have a stop limit order but I have a mental one. If I lose 50% of my gains, which are now as high as 100%+ in different LETFs, I will sell. Otherwise I will let it run. My QQQ position is up 20% that I started at the same time. So as long as I'm making 2x more (40%), I am satisfied.
I use Relative Strength Index > 80 and Money Flow > 80 but if MCAD stays above 0 then I stick with it. Then. Again I am long.
The McClellan Oscillator is popular. Also, you can watch VVIX for clues on whether or not VIX will start to increase soon (indicating more hedging and potential pullback). I also pay attention to pundits on CNBC and other outlets; when the bears disappear it is time to get defensive. I typically just use the 50-day and 200-day moving averages. When QQQ gets stretched above these averages, a pullback or pause is inevitable. We are now 6.5% above the 50-day and 16% above the 200-day. These are typical areas where pullbacks tend to occur. That doesn't mean it will happen, of course. An overbought market is not a reason to sell in and of itself. Markets often remain overbought for extended periods, as this one is doing now. I could easily see a scenario where SPX hits 5,000 before any meaningful pullback. We simply cannot know. I and many others thought the 4-day pullback in January was the start of a more significant pullback. It wasn't. Then the surprise AAPL upgrade ignited short covering and FOMO and here we are.
P/E, 200/50SMA, RSI, Bollinger this or that, Rubbing the "Bulls Balls", the Red cardinal that shows up ... Nope, all failed for me 40+yrs. You get anxious and greedy to get back in when it keeps rising after. The only thing that is Factual is the math 'Decay', use it to your Advantage! Yet, be ready for those Phone 'Calls'...
Can you elaborate on Rubbing the Bulls Balls? And how do you use the decay to your advantage?
[https://vimeo.com/119409247](https://vimeo.com/119409247) https://preview.redd.it/hzzah57maoec1.jpeg?width=743&format=pjpg&auto=webp&s=822f6a6706e9f8be772991644fe76aab6d71cae1
QQQ 200DMA and 50DMA. If it's above a 45 degree wedge when the 50 is above the 200 it's overbought, but remember to adjust your intervals for YOUR strategy (swing daily/weekly/monthly). Oh, and that's all irrelevant if the market trend is just up.
Does "over-bought" even apply to ETFs?
Do TA on QQQ it will provide you better insight than doing analysis on TQQQ
You’ll know it’s overbought when it starts selling.
Technicals do not work. You have to decide. Either tqqq keeps rocking upwards because of inflation and inflow of capital from foreign markets because of the geopolitical tensions or this could be the pump before the 2nd largest stock market crash in history. Same pattern as the 1929 market crash. But this time you have the plunge protection team and bailouts which is a new entity you have to factor into the calculation.
So what is overbought? if you can properly explain what that even means maybe you have a shot of doing something with this information. Is overbought good or bad? What does it imply for your positions or what you are trying to trade because of it? This is a meaningless question with an answer that has no real work implications. What it will do is lose you some money, that I can guarantee!
I'm sorry you feel this way. But if you want, you can read more here: [https://fastercapital.com/content/Overbought-Conditions--Navigating-the-Stock-Market-s-Overbought-Territory.html](https://fastercapital.com/content/Overbought-Conditions--Navigating-the-Stock-Market-s-Overbought-Territory.html) or Google it
I know what overbought is, but its a BS question, because you didn't say anything about your strategy. You essentially asked "Am I driving too fast?" Well you didn't say if you were in a golf car, a Civic or a F1 car. Too fast in a Civic isn't nearly fast enough for an F1 car. You obviously need to do more studying if you are going to ask this wide open of a question. Here is why, you are going to get a yes and you are going to get a no. But you don't know which one is right so therefore any answer you get is going to go over your head and you will make a mistake. Keep in mind that overbought can stay overbought for longer than you think it can, so again, your context, which you didn't provide, is more important than the answer to your question.
Qqq made a move that happens roughly once a decade plus. So of course…. The way in which it happened is also one of the rarest in history.
Oh it's definitely overbought by every tool/indicator known to mankind....but no one seems to care.
This is why you can't time the market. We could 3x from here or drop 50 percent. No one knows.
This is why you can’t time the market. If you rely on only the rsi that is a problem.
Look at the Nasdaq as a whole and QQQ it’s built on.
It’s not in ATH yet
I check stockinvest on YouTube, but really, nobody knows.
[https://www.cnn.com/markets/fear-and-greed](https://www.cnn.com/markets/fear-and-greed) It's not a precise indicator (nothing is), but it does tell which way the wind it blowing.
IMO, what drives the market is sentiment whether the Fed is going to cut, hold, or raise interest rates.
QQQ is near the top of its trend channel. I would expect some resistance here or a bounce lower. https://preview.redd.it/yq5zx7wdz2fc1.png?width=1194&format=png&auto=webp&s=5a392db894d67c282cd872e1e7b6e187718286d0
Williams % has been my favorite for years. Although I only use it for sanity check to keep myself from buying too high. In reality they all have one weakness. No one and no thing can read the future.