QQQQ Trend Analysis - 11/10/2006

QQQQ Trend Analysis - 11/10/2006

It was a positive week for the major markets. The Dow and the S&P 500 gained 1% and 1.2%, respectively, and the QQQQ was up 1.06 points or 2.55%.

Oscillators Trend Analysis Candle Symbol Daily Weekly Daily Weekly Mtly Qtly Yrly sticks QQQQ

S&P 500 Long-term perspective: Our perspective has not change. The S&P 500 is now near the long-term channel resistance line. There are two possible scenarios that we would like to consider. 1. The S&P 500 index turns from the channel resistance line and moves down until it reaches the channel support line. 2. The S&P 500 turns from the channel resistance line and moves down for a few weeks to reset overbought technical indicators, and then the index rally again to retest long-term channel resistance. In this scenario S&P may form a rising wedge along the channel resistance line. In both scenarios suggested above the index should turn down near the long-term channel resistance line. S&P 500 index uptrend from 6/14/2006 has 3 waves structure so far. If scenario #2 is correct, S&P 500 index is going to move down, and then the market will rally into the end of the year. It will present waves 4 and 5 to complete 5 waves impulse structure.

QQQQ Long-term perspective: Our long-term perspective has not change. There is a strong long-term resistance area between 43.05 and 43.31. It is very unlikely for strongly overbought QQQQ to break this resistance level. There are two long-term QQQQ scenarios correlated with S&P 500 long-term perspective. 1. If S&P 500 scenario #1 is in play, then QQQQ is forming double top pattern and move down to retest its July low - 35.54. 2. If S&P 500 scenario #2 unfolds, then QQQQ move down for several weeks to reset overbought indicators and resume uptrend. In this scenario QQQQ has chances to break 43.05 - 43.31 and even reach long-term uptrend resistance area around 45-46.

QQQQ - Long-Term Trend

QQQQ Short-term perspective: QQQQ made an attempt to break the long-term resistance area. It was able to reach 43.35 level that is 0.04 points higher than January 11 high. It is the highest level since 8/3/2001. On the other hand, QQQQ weekly indicators are strongly overbought, and weekly stochastic has a bearish divergence that indicates that the rally is loosing the steam. On Thursday QQQQ had a Bearish Dark Cloud Cover candlestick. This candlestick pattern usually appears after a strong up-trend when the atmosphere is bullish. Dark Cloud Cover candlestick shows that the bears start to show up, and that the uptrend may have stopped. This candlestick is usually considered as a good shorting opportunity, with a stop being the high of the black candle day.

QQQQ - Short-Term Trend

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