First understand that with a head fake move, it's truly what is sounds like, it's a move to fool people and it wasn't a week and a half ago that the motto was "Short the rip" or Sell the Rip", replacing, "Buy the dip", investors got too bearish too quick.
January 24th we had quite a few posts that made it seem reasonable that the following week (starting with Monday Jan 27th) we'd see a range start early in the week.
"That's the gist of it, unless there's a fundamental surprise, I don't see any "V" shaped bounce, the most likely thing would be lateral trade early next week "Jan 24th...
That lateral range looked like this...
Our Friday afternoon post on Jan 31st, "Come Monday" which was the last day in the range made a prediction for the following Monday based on 3C's closing and mass psychology or market behavior...
"Ultimately though it came down to the 3C concept of "3C signals picking up where they left off on the next trading day" whether that be the very next day or over a 3-day weekend.
The other concept that has very high probabilities is that of a head fake move before a reversal or in this case, before a breakout from the week's lateral range which is normally at 80% of the time. The longer the defined range is, the more probable a head fake move is to occur and we had a week long defined range.
The Bellwether stocks were in agreement, which makes long entries in them very enticing on a head fake move, that's actually the best entry we can get as far as price and profit , risk and timing since a head fake move occurs just before a move.
Since the major concept and most probable concept that will likely define the start of trade next week and the move that comes after is almost solely the head fake move, I think it is of utmost importance that you understand what this move is, why it occurs, what the signs of it are, what the effects of it are... "
Now look at the negative divegrence to the left and how big it was and how much damage it did, NOW LOOK AT THE CURRENT LEADING NEGATIVE DIVEGRENCE, NOT ONLY IS IT A LEADING DIVEGRENCE VS. A FORMER RELATIVE DIVEGRENCE, BUT IT IS MUCH SHARPER AND LARGER, IMAGINE WHAT THIS WILL DO.
I compared this QQQ daily chart to the 2000 Dot.Com Bubble which I'll repost at the bottom.