Round Number Focus:

In these volatile times often simplicity can be a source of comfort. When we tend to overanalyze is when bad decisions or sometimes no action is taken. If one believes in round number theory as I do, of course on the S&P 500 the big psychological 4000 figure comes into play which roughly aligns with the upward sloping 50-day SMA. The benchmark came within 17 handles of the number before recording a modest bounce. The Nasdaq traded below the 12000 level briefly intraday Monday before it found a slight bid. Below is the chart of the QQQ and it too has a focus on the 300 area. All three of these aforementioned instruments also have Bollinger Bands that are tightening, which is an indication of a big imminent move although the direction of which is ambiguous. On the chart below of the QQQ, we can see the second retest of the 50-day SMA since reclaiming the line 7 weeks ago. It undercut the breakout above an ascending triangle but I think the risk/reward here is to the upside after a 30-handle decline since the 8/16 doji candle which completed the bearish harami cross. 

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