8/5/14 kill dropped 1.07 to 122.91. the Index to QQQ gap is now 6.71 with 7 more days of data to come in. The model shows that the daily CME Index components will need to drop an average of 1.01/day to get the index down to where the QQQs are trading.
The Index has been on a strong down-trend for some time. It is interesting to note that the average daily decline in the component for the past seven days has been 0.93.
This suggests to me that getting long the QQQs at 116 or lower does not carry with it an unreasonable risk. On the spike this morning, I dumped most of my long QQQs and have now reloaded a bit. I will reload more is we drop below 116.00.
Best wishes,
dhm