S&P 500 resistance is near 965

The Stock Market Week - 11/28/2008

It was an up week for the major markets. For the week the Dow Jones Industrial Average gained 782.62 points, or 9.73%. The Standard & Poor's 500 Index gained 96.21 points, or 12.03%, while the Nasdaq Composite gained 151.22 points, or 10.92%. The Financial sector was the strongest sector last week for the second week in a row, followed by the Consumer Discretionary sector. The Utilities is the most overvalued sector now, followed by, Healthcare, while Gas Utilities, Drugs - Generic, and Major Integrated Oil/Gas are among the most overvalued industries. Industrial Goods is the most oversold sector, followed by Technology while Metals Fabrication, Multimedia/Graphics Sftwr, Copper are among the most overvalued industries.

Standard & Poor's 500 Index Trend Analysis Standard & Poor's 500 Index is in a long-term down trend that started on 10/11/2007 at 1576.09. According to the Elliot Wave Principle, the market’s progress ultimately takes the form of the five waves structure. The first (I) wave down has been completed on 1/23/2008 at 1270.05 and dropped almost 20%. According to the Wave Principle, the third wave is the strongest and the broadest and it generates the greatest volume and price movement. The third (III) wave down has started on 5/19/2008 at 1440.24 and dropped more than 48.5%, reaching 741.02 level on 11/21/2008. The third wave usually has the five sub waves structure itself.

Standard & Poor's 500 - Long-Term Trend

The sub wave 5 down of the long-term down wave three (III) is in progress. Elliot Wave principle considers the wave five as the last sub wave in impulse wave structure. The fifth wave is usually less powerful than the third wave; it shows slower speed of price change and presents bullish divergence between price and technical indicators. Daily and weekly technical indicators have bullish divergence. Bullish divergence is usually considered as an indicator that bears are losing power, and that bulls are ready to control the market again. Often bullish divergence marks the end of a downtrend, but it may mark the consolidation period before the next down move as well. The resistance trend line is near 965 now and the support trend line is near 738. It is quite possible that S&P 500 index will turn down to retest the support line once more.

Standard & Poor's 500 - Long-Term Trend

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S&P 500 technical indicators have bullish divergence

The Stock Market Week - 11/14/2008

All the major US indices were negative. For the week the Dow Jones Industrial Average dropped 446.50 points, or 4.99%. The Standard & Poor's 500 Index dropped 57.70 points, or 6.20%, while the Nasdaq Composite dropped 130.55 points, or 7.92%. Industrial Goods and Technology are the most oversold sectors, while Utilities and Healthcare are the most overvalued sectors.

Standard & Poor's 500 Index Trend Analysis Standard & Poor's 500 Index is in a long-term down trend that started on 10/11/2007 at 1576.09. The third (III) wave down has started on 5/19/2008 at 1440.24 and lost almost 43.3% reaching 816.69 level on 10/14/2008. The sub wave 5 down of the long-term down wave three (III) is in progress. Elliot Wave principle considers wave five as the last sub wave in impulse wave structure. The fifth wave is usually less powerful than the third wave; it shows slower speed of price change and presents bullish divergence between price and technical indicators. Daily and weekly technical indicators have bullish divergence. Bullish divergence is usually considered as an indicator that bears are losing power, and that bulls are ready to control the market again. Often bullish divergence marks the end of a downtrend, but it may mark the consolidation period before the next down move as well.

Standard & Poor's 500 - Long-Term Trend

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Major indices have formed a triangle chart pattern

The Stock Market Week - 10/31/2008

It was an up week for the major markets. For the week the Dow Jones Industrial Average gained 946.06 points, or 11.29%. The Standard Poor's 500 Index gained 91.98 points, or 10.49%, while the Nasdaq Composite gained 168.92 points, or 10.88%. Our Weekly Picks portfolio gained 17.24% for the week. All three major indices have formed a short-term descending triangle pattern. Usually, in a mature trend a triangle pattern is considered as a reversal pattern.

Dow Jones Industrial Average - Short-Term Trend

Standard & Poor's 500 - Short-Term Trend

Nasdaq Composite Index - Short-Term Trend

Standard & Poor's 500 Index Trend Analysis Standard & Poor's 500 Index is in a long-term down trend that started on 10/11/2007 at 1576.09. The third (III) wave down has started on 5/19/2008 at 1440.24 and lost more than 40% reaching 839.8 level on 10/10/2008. The chart has formed a short term descending triangle pattern. The chart retested its low on 10/28/2008 and rebound sharply from 845.27 to 984.36 just is four days. The sharp rebound from the support level confirms the end of the short-term sub wave 3, and it may be the end of the long-term wave (III) as well. The weekly Lane's Stochastic is still oversold, but other daily and weekly technical indicators are natural. The resistance level is around 1070, and then 1140.

Standard & Poor's 500 - Long-Term Trend

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Bear market technical indicators

The Stock Market Week - 10/10/2008

On September 9th, when S&P 500 index was at 1,242.31, we suggested that, the S&P 500 is now in sub wave three of the third down wave, which is considered the worse in the five-wave structure. In one month index lost 27.6% and closed on Friday at 899.22. The Standard & Poor's 500 index had suffered its worst week since 1933. All the major US indices were negative. For the week the Dow Jones Industrial Average dropped 1874.19 points, or 18.15%. The Standard & Poor's 500 Index dropped 200.01 points, or 18.20%, while the Nasdaq Composite dropped 297.88 points, or 15.30%. The Consumer Staples sector has traditionally performed better than the stock market during market declines. The Consumer Staples sector was the strongest sector last week for the second week in a row, followed by the Technology sector. The Energy sector was the worst performing sector of the week followed by the Utilities sector. The Financial sector is the most overvalued sector now, followed by, Consumer Goods, while Tobacco Products Other, Regional-Mid-Atlantc Bnks, Home Improvement Stores, and Cleaning Products are the most overvalued industries. Conglomerates is the most oversold sector, followed by Basic Materials while Processing Systems/Prods, Aluminum, Metals Fabrication, Personal Computers are the most overvalued industries.

Dow Jones Industrial Average Trend Analysis Three months ago in our publication on July 11th we suggested that Dow Jones Industrial Average long-term chart has formed a head and shoulders pattern. The price was at 11,100.54 then, and the pattern price target was approximately 9000, that three month back sound like a very pessimistic prediction. Last week Dow Jones dived below 9000 level and close on Friday at 8,451.19. The sharp price drop moved daily William's Percentage Range (W%R) into oversold area, while weekly W%R is strongly oversold. The oversold W%R is usually considered as an early warning indicator that signals exhaustion of the sharp down trend and predicts that it may slow down and reverse soon. Daily and weekly Relative Strength Index and Lane's Stochastic indicators are still natural.

Dow Jones Industrial Average - Long-Term Trend

Standard & Poor's 500 Index Trend Analysis Standard & Poor's 500 Index is in a long-term down trend that started on 10/11/2007 at 1576.09. The chart has formed a falling channel pattern. The third wave down is in progress now. It has started on 5/19/2008 and it is now forming a sub wave three down as well. According to this wave count, the S&P 500 is now in sub wave three of the third down wave. This sub wave is considered the worse in the five-wave structure. The support line is broken. Daily and weekly William's Percentage Ranges and daily Relative Strength Index are oversold, while daily Lane's Stochastic indicator is strongly oversold. According to the technical indicators, the sub wave three might be close to completion.

Standard & Poor's 500 - Long-Term Trend

Nasdaq Composite Index Trend Analysis As we suggested previously, the Nasdaq Composite index had formed the long-term symmetric triangle chart pattern with sharp breakdown. The price target for a triangle pattern is usually derived by measuring the distance between the starting high point of the ascending triangle with the starting low point of the triangle, which is then projected downward from the breakpoint. According to our calculation, the projected price target should be around 1640. The Nasdaq Composite index price hit 1542.45 low on Friday. Daily Relative Strength Index and weekly Lane's Stochastic indicators are oversold, while daily and weekly William's Percentage Ranges and daily Lane's Stochastic indicators are strongly oversold. The sharp breakdown from the long-term symmetric triangle chart pattern could be close to completion.

Nasdaq Composite Index - Long-Term Trend

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Worst week for the US stock market since September 2001

The Stock Market Week - 10/03/2008

As we had mentioned in our previous publications, the S&P 500 is now in sub wave three of the third down wave, which is considered the worse in the five-wave structure. The recent financial events appear to be the worse in the history of US financial market so far. "America's economy is facing unprecedented challenges," president Bush declared. It was the worst week for the US stock market since September 2001. All the major US indices were negative. For the week the Dow Jones Industrial Average dropped 817.75 points, or 7.34%. The Standard & Poor's 500 Index dropped 113.78 points, or 9.38%, while the Nasdaq Composite dropped 235.95 points, or 10.81%. The Consumer Staples sector was the strongest sector last week followed by the Health Care sector, while the Materials sector was the worst performing sector of the week followed by the Energy sector. The Consumer Staples is the most overvalued sector now, followed by Financial sector; while Tobacco Products Other, Regional-Mid-Atlantic Banks, and Dairy Products are the most overvalued industries. The Basic Materials is the most oversold sector, followed by Conglomerates sector, while Processing Systems/Prods, Metals Fabrication, and Aluminum industries are among the most oversold industries

Bear market statistics (19 during the last 100 years)

Description Average Current Worst Mildest Time from the end of one bear market to the beginning of the next 45.3 months 60 months N/A N/A Length of a bear market 18.5 months 12 months 47 month (ended in 1949) 2 month (ended in 1987) Bear market decline 36% 28% 89% (ended in 1932) 21% (ended in 1990)

Dow Jones Industrial Average Trend Analysis Dow Jones Industrial Average long-term chart has formed a head and shoulders pattern. The price retested the neckline and has resumed the long-term downtrend. The pattern should be close to completion, but the price did not reach the target yet. The sharp price drop moved daily William's Percentage Range (W%R) into oversold area, while weekly W%R is strongly oversold. The oversold W%R is usually considered as an early warning indicator that signals exhaustion of the sharp down trend and predicts that it may slow down and reverse soon.

Dow Jones Industrial Average - Long-Term Trend

Standard Poor's 500 Index Trend Analysis Standard & Poor's 500 Index is in a long-term down trend that started on 10/11/2007 at 1576.09. The chart is forming a falling channel pattern. The support line is around 1140. The third wave down is in progress now. It has started on 5/19/2008 and it is now forming a sub wave three down as well. According to this wave count, the S&P 500 is now in sub wave three of the third down wave. This sub wave is considered the worse in the five-wave structure. Daily Lane's Stochastic indicator is oversold, while daily and weekly William's Percentage Ranges are strongly oversold. Other technical indicators might be in oversold area soon. The sub wave three might be close to completion within several weeks.

Standard Poor's 500 - Long-Term Trend

Nasdaq Composite Index Trend Analysis The Nasdaq Composite index was in a long-term uptrend since 2002. As we suggested previously, the price was forming a symmetric triangle chart pattern. A triangle pattern usually represents an area of indecision, where the direction of the movement is questioned. In a mature trend a triangle chart pattern usually appears as a reversal formation. Recently the triangle pattern had a sharp breakdown with noticeable increase in volume. The price target for a triangle pattern is usually derived by measuring the distance between the starting high point of the ascending triangle with the starting low point of the triangle, which is then projected downward from the breakpoint.

Nasdaq Composite Index - Long-Term Trend

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Major indices posted the biggest gains since 2002

The Stock Market Week - 9/19/2008

In our previous publication on September 5th we suggested that "the S&P 500 is now in sub wave three of the third down wave. This sub wave is considered the worse in the five-wave structure". The recent financial events appear to be the worse in the history of US financial market so far. "America's economy is facing unprecedented challenges," president Bush declared in a press conference Friday. The crisis has forced 12 federally insured banks and thrifts into failure this year. Another 117 banks and thrifts were considered to be in trouble in the second quarter with the total assets of troubled banks tripling to $78 billion, according to the Federal Deposit Insurance Corp. On Monday September 15 week the Dow Jones Industrial Average lost 4.42%, this is the biggest loss since July 19, 2002 when Dow lost 4.6%. The Standard & Poor's 500 Index and Nasdaq Composite lost on Monday 4.71% and 4.94%; these are biggest losses since September 17, 2001 when they lost 4.92% and 6.83%. For the first tree days of last week the Dow Jones Industrial Average lost 7.11% while Standard & Poor's 500 Index and Nasdaq Composite lost 7.61% and 7.18%. These were the biggest losses since August 5, 2002 when major indices lost 7.93%, 8.45%, and 9.20% in three consecutive trading sessions. For the last two days of the week the Dow Jones Industrial Average gained 7.34% while Standard & Poor's 500 Index and Nasdaq Composite gained 8.53 % and 8.34 %. It was the biggest gain since October 11, 2002 when Dow Jones gained 7.74% while Nasdaq Composite gained 8.65%% in two consecutive trading sessions. For the week the Dow Jones Industrial Average gave back 33.55 points, or 0.29%. The Standard & Poor's 500 Index climbed 3.38 points, or 0.27%, while the Nasdaq Composite climbed 12.63 points, or 0.56%. After the government intervention, the Financial sector was the strongest sector last week followed by the Energy sector. The Basic Materials and Technology are the most oversold sectors while Processing Systems/Prods, Semiconductor - Memory Chips, and Semiconductor-Intgrtd Circ are among the most oversold industries.

Dow Jones Industrial Average Trend Analysis Dow Jones Industrial Average long-term chart has formed a head and shoulders pattern. The price retested the neckline and has resumed the long-term downtrend. The pattern should be close to completion, but the price did not reach the target yet. The price drop did not move weekly technical indicators into oversold area as usually happens at the end of the long-term downtrend.

Dow Jones Industrial Average - Long-Term Trend

Standard Poor's 500 Index Trend Analysis Standard & Poor's 500 Index is in a long-term down trend that started on 10/11/2007 at 1576.09. The chart is forming a falling channel pattern. The support line is around 1190, and the resistance line is near 1360. The third wave down is in progress now. It has started on 5/19/2008 and now it is forming the sub wave three down as well. According to this wave count, the S&P 500 is now in sub wave three of the third down wave. This sub wave is considered the worse in the five-wave structure. Both weekly and daily technical indicators are neutral. The downtrend is not completed yet. The price may spend some time in indecision area after the government intervention, but then the long-term downtrend may resume soon.

Standard Poor's 500 - Long-Term Trend

Nasdaq Composite Index Trend Analysis The Nasdaq Composite index is in a long-term uptrend since 2002. As we suggested previously, the price is forming a symmetric triangle chart pattern. A triangle pattern usually represents an area of indecision, where the direction of the movement is questioned. In a mature trend a triangle chart pattern usually appears as a reversal formation. Last week the triangle pattern had a breakdown with noticeable increase in volume. The price target is below 2000.

Nasdaq Composite Index - Long-Term Trend

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Dow Jones - head and shoulders pattern

The Stock Market Week - 9/5/2008

All the major US indices were negative. For the week the Dow Jones Industrial Average dropped 322.59 points, or 2.79%. The Standard Poor's 500 Index dropped 40.52 points, or 3.16%, while the Nasdaq Composite dropped 111.64 points, or 4.72%. The Financial sector was the strongest sector last week followed by the Consumer Staples sector. The Energy sector was the worst performing sector of the week followed by the Materials sector.

Dow Jones Industrial Average Trend Analysis Dow Jones Industrial Average long-term chart has formed a head and shoulders pattern. As we suggested in our earlier publications, the Dow Jones has retested the neckline. The short-term rally has reached 11,933.55 on August 11. This level was close to the Fibonacci 50% retracement level. Since August 11 the Dow Jones has resumed the long-term downtrend.

Dow Jones Industrial Average - Long-Term Trend

The short-term chart is forming a sharp falling channel. Both weekly and daily Williams' % Range (W%R) indicators are oversold while other technical indicators are neutral. Oversold W%R usually indicates that the recent chart slope is too steep and might not be sustainable.

Dow Jones Industrial Average - Short-Term Trend

Standard Poor's 500 Index Trend Analysis Standard & Poor's 500 Index is in a long-term down trend that started on 10/11/2007 at 1576.09. The chart is forming a falling channel pattern. The support line is around 1190, and the resistance line is near 1360. The third wave down is in progress now. It has started on 5/19/2008 and now it is forming the sub wave three down as well. According to this wave count, the S&P 500 is now in sub wave three of the third down wave. This sub wave is considered the worse in the five-wave structure. Both weekly and daily Williams' % Range (W%R) indicators are oversold while other technical indicators are neutral.

Standard Poor's 500 - Long-Term Trend

Nasdaq Composite Index Trend Analysis The Nasdaq Composite index is in a long-term uptrend since 2002. As we suggested previously, the price is forming a triangle chart pattern. A triangle pattern usually represents an area of indecision, where the direction of the movement is questioned. In a mature trend a triangle chart pattern usually appears as a reversal formation. Daily technical indicators are overbought.For several months the Nasdaq Composite index has been the strongest among the major US stock market indices. Last week Nasdaq dropped 4.72%, and was the weakest. The daily Williams#39; % Range is strongly oversold, while daily Lane#39;s Stochastic and weekly Williams#39; % Range is oversold. Price is near a long-term trend support.

Nasdaq Composite Index - Long-Term Trend

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Nasdaq is forming a triangle chart pattern

The Stock Market Week - 7/18/2008

It was a mixed week for the major markets. For the week the Dow Jones Industrial Average gave back 74.42 points, or 0.63%. The Standard Poor's 500 Index climbed 1.89 points, or 0.15%, while the Nasdaq Composite gained 38.42 points, or 1.59%. The Consumer Discretionary sector was the strongest sector last week followed by the Materials sector. The Financial sector was the worst performing sector of the week followed by the Utilities sector.

Dow Jones Industrial Average Trend Analysis Dow Jones Industrial Average long-term chart has formed a head and shoulders pattern. On July 11, when the Dow Jones was at 10,908.64, we suggested that price might retest the neckline before continuing the long-term downtrend. Last Monday the Dow Jones reached 11,933.55 level.

Dow Jones Industrial Average - Long-Term Trend

Both weekly and daily technical indicators are reset to natural. The short-term rally is still in progress. The Dow Jones Industrial Average closed on Friday at 11,659.90 - approximately 200 points above the short-term uptrend support level. The Fibonacci 50% retracement level is near 11954.

Dow Jones Industrial Average - Short-Term Trend

Standard Poor's 500 Index Trend Analysis Standard Poor#39;s 500 Index is in a long-term down trend that started on 10/11/2007 at 1576.09. The chart is forming a falling channel pattern. The support line is around 1190, and the resistance line is near 1365. The Fibonacci 50% retracement level is near 1320. The third wave started on 5/19/2008. The short-term rally, that we had anticipated, is in process now. 70 out of 500 S&P members have the downtrend resistance alert. The downtrend may resume soon.

Standard Poor's 500 - Long-Term Trend

Nasdaq Composite Index Trend Analysis The Nasdaq Composite index is in a long-term uptrend since 2002. The price is forming a triangle chart pattern. A triangle pattern usually represents an area of indecision, where the direction of the movement is questioned. In a mature trend a triangle chart pattern usually appears as a reversal formation. Daily technical indicators are overbought.

Nasdaq Composite Index - Long-Term Trend

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S&P 500 has formed a Bearish Advance Block pattern

The Stock Market Week - 7/18/2008

In our previous publication on June 13, we suggested that major market indices are oversold, and we expected a short-term rally soon. All there major indices had a sharp rally this week. For the week the Dow Jones Industrial Average gained 396.03 points, or 3.57%. The Standard Poor's 500 Index gained 21.19 points, or 1.71%, while the Nasdaq Composite gained 43.70 points, or 1.95%. Finally, after a long decline, the Financial sector became the strongest sector last week followed by the Consumer Discretionary sector. The Energy sector was the worst performing sector of the week followed by the Utilities sector.

Dow Jones Industrial Average Trend Analysis Dow Jones Industrial Average long-term chart has formed a head and shoulders pattern. This pattern is near completion. It is common for a head and shoulders pattern to retest the neckline. The neckline (around 11500) now becomes an important resistance level. The Dow Jones may retest this level, offering a second chance to sell, before moving down again.

Dow Jones Industrial Average - Long-Term Trend

Standard Poor's 500 Index Trend Analysis Standard Poor's 500 Index is in the long-term down trend that started on 10/11/2007 at 1576.09. The chart is forming a falling channel pattern. The support line is around 1200, and the resistance line is near 1375. The first down wave had five-wave structure, and it was completed on 3/17/2008 at 1256.98. Standard Poor's 500 Index is in the third down wave of the long-term down trend. The third wave started on 5/19/2008. The short-term rally, that we had anticipated, is in process now. The third wave down might not be completed yet, and it may resume soon. On Friday, Standard Poor's 500 Index has formed a Bearish Advance Block candlestick pattern.The Bearish Advance Block candlestick pattern is more meaningful during a mature uptrend. It is a sign of weakness, and it often precedes a meaningful price decline. A confirmation of the reversal on Monday might provide the needed proof that the short-term rally has reversed.

Standard Poor's 500 - Long-Term Trend

Nasdaq Composite Index Trend Analysis The Nasdaq Composite index is retesting the long-term rising support line. As you can see in the chart below, this trend line served as a support line for five years, and Nasdaq Composite index was not able to break it. Every time the chart had touched the support line, the daily and weekly technical indicators had been in oversold area. Now for the first time weekly technical indicators are natural. It makes the support line much weaker. After the short-term rally that we anticipated last week, Nasdaq Composite index might retest the long-term support line once more and the weakened support line might be broken.

Nasdaq Composite Index - Long-Term Trend

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Dow Jones is forming a head and shoulders pattern

The Stock Market Week - 7/11/2008

All the major US indices were negative. For the week the Dow Jones Industrial Average dropped 188.00 points, or 1.67%. The Standard Poor's 500 Index dropped 23.41 points, or 1.85%, while the Nasdaq Composite gave back 6.30 points, or 0.28%.

Dow Jones Industrial Average Trend Analysis Dow Jones Industrial Average long-term chart is forming a head and shoulders pattern. The projected price decline for a head and shoulders pattern is usually found by measuring the distance from the neckline to the top of the head. This distance is then subtracted from the neckline to reach a price target. The calculation gives approximately 9000 as a rough long-term target. This price target looks very pessimistic now, and it should be considered with other technical indicators as well. Daily and weekly technical indicators are oversold. The neckline (around 11500) now becomes an important resistance level. The Dow Jones may retest this level before moving down to a 9000 long-term target.

Dow Jones Industrial Average - Long-Term Trend

Standard Poor's 500 Index Trend Analysis Standard Poor's 500 Index is in the long-term down trend that started on 10/11/2007 at 1576.09. Standard Poor' 500 Index lost already almost 20%. The first down wave had a five waves structure and was completed on 3/17/2008 at 1256.98. Standard Poor's 500 Index is in the third down wave of the long-term down trend. The third wave started on 5/19/2008 and may take five to six month to be complete. In the short-term all technical indicators are oversold. A short-term rally might be expected soon.

Standard Poor's 500 - Long-Term Trend

Nasdaq Composite Index Trend Analysis For the last several month the Nasdaq Composite index is the strongest among the major indices. It is retesting the long-term support line, while Dow Jones and Standard & Poor's 500 indices had already broken this line. The current falling channel looks strong, but daily and weekly technical indicators are oversold. The downtrend may pause for a while before breaking the long-term support around 44.

Nasdaq Composite Index - Long-Term Trend

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The QQQQ is forming a new falling channel

The Stock Market Week - 6/27/2008

All the major US indices were negative. The Dow Jones Industrial Average was the weakest among the major market indices. It closed on Friday at the lowest level since September 7, 2006. For the week the Dow Jones Industrial Average dropped 496.18 points, or 4.19%. The Standard Poor's 500 Index dropped 39.55 points, or 3.00%, while the Nasdaq Composite dropped 90.46 points, or 3.76%. The Energy sector was the strongest sector last week followed by the Health Care sector. The Financial sector was the worst performing sector of the week followed by the Industrial sector. The Conglomerates and Financial are the most oversold sectors, while Regional-Southeast Banks, Sporting Goods, Housewares Accessories, and Appliances are among the most oversold industries. The Basic Materials and Utilities are the most overvalued sectors, while Beverages-Brewers, Gas Utilities, Metals Fabrication, and Oil Gas Drilling/Explore are among the most overvalued industries.

Nasdaq Trend Analysis

In our previous QQQQ analysis on June 20th, we suggested that "the weekly Lane's Stochastic falls below 80% level, and %K line falls below %D. Both signs are usually considered as a sell signal". It was a negative week for the QQQQ. The QQQQ lost 3.73% for the week.

QQQQ Long-term technical analysis: Our long-term outlook has not changed. We consider two possible scenarios: Scenario 1. The long-term uptrend (10/08/2002 - 10/31/2007) is over, and a new long-term downtrend started on 10/31/2007. The sub wave 2 (0/31/2007 - present) is currently in progress and almost completed. The sub wave 3 down should start soon and break the long-term support trend line around 43ᇀ, and then it'll go lower than the recent low of 41.05 and move down to about 35 in the late fall. Scenario 2. The long-term uptrend that started on 10/08/2002 is still in progress, with sub wave 5 currently in progress. The wave 5 is usually tricky. It might be truncated and form a double top pattern or not even reach the previous high - 55.07. Which scenario we are going to see may depend on how successful the FED's rate cut would be. The FED's market regulation supposed to weaken the upcoming recession, but FED should not use their power to turn the recession into a new bull market. If FED overdoes the rate cut, we may see the scenario 2. With this scenario, by the end of the wave 5 FED will not have enough room for a new rate cut, and the next long-term downtrend would be even more severe. "This will probably not prove to be the final bottom" said billionaire George Soros, referring to the rally in stocks after JPMorgan Chase agreed to buy Bear Stearns on March 17. He added that the rebound might last six weeks to three months as the US moves closer to a recession.

QQQQ - Long-Term Trend

QQQQ Short-term technical analysis: Weekly rising channel (March 17 – June 5) is broken. The new falling channel is forming, and the price is near the channel support. Daily William's Percentage Range (W%R) and Lane's Stochastic (%D-Slow) are oversold. Broad market is oversold on daily and weekly bases. 133 members of Standard Poor's 500 Index are oversold, while only 4 overbought. The sharp decline might pause soon, and QQQQ may move up toward the weekly falling channel resistance. The next QQQQ long-term support is near 44.

QQQQ - Short-Term Trend

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For the week Nasdaq Composite dropped 1.97%

The Stock Market Week - 6/20/2008

All the major US indices were negative. For the week the Dow Jones Industrial Average dropped 464.66 points, or 3.78%. The Standard Poor's 500 Index dropped 42.10 points, or 3.10%, while the Nasdaq Composite dropped 48.41 points, or 1.97%. For the last several month the Nasdaq Composite index outperformed the Dow Jones and Standard Poor's 500 Indices. The Energy sector was the strongest sector last week followed by the Utilities sector. The Consumer Discretionary sector was the worst performing sector of the week followed by the Financial sector. Basic Materials is the most overbought sector followed by Utilities, while Gas Utilities, Metals Fabrication, and Oil Gas Pipelines are among the most overbought industries. The Financial is the most oversold sector followed by Consumer Goods, while Regional-Southeast Banks, Appliances, and House wares & Accessories are the most oversold industries.

Nasdaq Trend Analysis

It was a negative week for the QQQQ. The QQQQ lost 1.96% for the week. In our previous publication on May 30th, we suggested that the QQQQ downtrend might resume soon. The QQQQ had reached 50.61 on June 5th and turned down, loosing more than 6.3% since then.

QQQQ Long-term technical analysis: Our long-term outlook has not changed. We consider two possible scenarios: Scenario 1. The long-term uptrend (10/08/2002 - 10/31/2007) is over, and a new long-term downtrend started on 10/31/2007. The sub wave 2 (0/31/2007 - present) is currently in progress and almost completed. The sub wave 3 down should start soon and break the long-term support trend line around 43ᇀ, and then it'll go lower than the recent low of 41.05 and move down to about 35 in the late fall. Scenario 2. The long-term uptrend that started on 10/08/2002 is still in progress, with sub wave 5 currently in progress. The wave 5 is usually tricky. It might be truncated and form a double top pattern or not even reach the previous high - 55.07. Which scenario we are going to see may depend on how successful the FED's rate cut would be. The FED's market regulation supposed to weaken the upcoming recession, but FED should not use their power to turn the recession into a new bull market. If FED overdoes the rate cut, we may see the scenario 2. With this scenario, by the end of the wave 5 FED will not have enough room for a new rate cut, and the next long-term downtrend would be even more severe. "This will probably not prove to be the final bottom" said billionaire George Soros, referring to the rally in stocks after JPMorgan Chase agreed to buy Bear Stearns on March 17. He added that the rebound might last six weeks to three months as the US moves closer to a recession.

QQQQ - Long-Term Trend

QQQQ Short-term technical analysis: All weekly and daily technical indicators are neutral now. The weekly Lane's Stochastic falls below 80% level, and %K line falls below %D. Both signs are usually considered as a sell signal. Lane's Stochastic signals should be considered in conjunction with other factors. At this point the strength of the downtrend will show if scenario #1 or #2 is in progress.

QQQQ - Short-Term Trend

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The QQQQ is retesting the rising channel support

The Stock Market Week - 5/30/2008

It was an up week for the major markets. For the week the Dow Jones Industrial Average gained 158.69 points, or 1.27%. The Standard Poor's 500 Index gained 24.45 points, or 1.78%, while the Nasdaq Composite gained 77.99 points, or 3.19%. The Technology sector was the strongest sector last week followed by the Industrial sector. The Energy sector was the worst performing sector of the week followed by the Financial sector.

Nasdaq Trend Analysis

Last week we expected that the QQQQ might see a brief rebound or pause. It was a positive week for the QQQQ. The QQQQ raised 3.76% for the week.

QQQQ Long-term technical analysis: Our long-term outlook has not changed. We consider two possible scenarios: Scenario 1. The long-term uptrend (10/08/2002 - 10/31/2007) is over, and a new long-term downtrend started on 10/31/2007. The sub wave 2 (0/31/2007 - present) is currently in progress and almost completed. The sub wave 3 down should start soon and break the long-term support trend line around 43ᇀ, and then it'll go lower than the recent low of 41.05 and move down to about 35 in the late fall. Scenario 2. The long-term uptrend that started on 10/08/2002 is still in progress, with sub wave 5 currently in progress. The wave 5 is usually tricky. It might be truncated and form a double top pattern or not even reach the previous high - 55.07. Which scenario we are going to see may depend on how successful the FED's rate cut would be. The FED's market regulation supposed to weaken the upcoming recession, but FED should not use their power to turn the recession into a new bull market. If FED overdoes the rate cut, we may see the scenario 2. With this scenario, by the end of the wave 5 FED will not have enough room for a new rate cut, and the next long-term downtrend would be even more severe. "This will probably not prove to be the final bottom" said billionaire George Soros, referring to the rally in stocks after JPMorgan Chase agreed to buy Bear Stearns on March 17. He added that the rebound might last six weeks to three months as the US moves closer to a recession.

QQQQ - Long-Term Trend

QQQQ Short-term technical analysis: Weekly William's Percentage Range (W%R) is strongly overbought and Lane's Stochastic is overbought, while daily technical indicators are neutral. The price is retesting the rising channel support. In our previous publication last week we expected the QQQQ brief rebound or pause. If long-term scenario #1 is in progress, then the downtrend may resume next week.

QQQQ - Short-Term Trend

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QQQQ weekly indicator is still strongly overbought

The Stock Market Week - 5/23/2008

All the major US indices were negative. For the week the Dow Jones Industrial Average dropped 507.17 points, or 3.91%. The Standard Poor's 500 Index dropped 49.42 points, or 3.47%, while the Nasdaq Composite dropped 84.18 points, or 3.33%.

Nasdaq Trend Analysis

Last week we expected that the resistance level at 50.6 should hold, and the QQQQ price might move down toward the support level of 48.08. The QQQQ reached 50.47 on Monday. Then price turned down losing 3.62% for the week and closed on Friday at 48.2.

QQQQ Long-term technical analysis: Our long-term outlook has not changed. We consider two possible scenarios: Scenario 1. The long-term uptrend (10/08/2002 - 10/31/2007) is over, and a new long-term downtrend started on 10/31/2007. The sub wave 2 (0/31/2007 - present) is currently in progress and almost completed. The sub wave 3 down should start soon and break the long-term support trend line around 43ᇀ, and then it'll go lower than the recent low of 41.05 and move down to about 35 in the late fall. Scenario 2. The long-term uptrend that started on 10/08/2002 is still in progress, with sub wave 5 currently in progress. The wave 5 is usually tricky. It might be truncated and form a double top pattern or not even reach the previous high - 55.07. Which scenario we are going to see may depend on how successful the FED's rate cut would be. The FED's market regulation supposed to weaken the upcoming recession, but FED should not use their power to turn the recession into a new bull market. If FED overdoes the rate cut, we may see the scenario 2. With this scenario, by the end of the wave 5 FED will not have enough room for a new rate cut, and the next long-term downtrend would be even more severe.

QQQQ - Long-Term Trend

QQQQ Short-term technical analysis: Weekly Lane's Stochastic is still strongly overbought, while daily technical indicators are neutral. The price has broken the rising channel support level. The QQQQ might see a brief rebound or pause, but the technical indicators and the wave structure for both long-term scenarios suggest that the downtrend may continue. Risk/reward ratio is high.

QQQQ - Short-Term Trend

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QQQQ technical indicators are overbought

The Stock Market Week - 5/16/2008

It was an up week for the major markets. For the week the Dow Jones Industrial Average gained 240.92 points, or 1.89%. The Standard Poor's 500 Index gained 37.07 points, or 2.67%, while the Nasdaq Composite gained 83.33 points, or 3.41%.

Nasdaq Trend Analysis

QQQQ Long-term technical analysis: Our long-term outlook has not changed. We consider two possible scenarios: Scenario 1. The long-term uptrend (10/08/2002 - 10/31/2007) is over, and a new long-term downtrend started on 10/31/2007. The sub wave 2 (0/31/2007 - present) is currently in progress and almost completed. The sub wave 3 down should start soon and break the long-term support trend line around 43ᇀ, and then it'll go lower than the recent low of 41.05 and move down to about 35 in the late fall. Scenario 2. The long-term uptrend that started on 10/08/2002 is still in progress, with sub wave 5 currently in progress. The wave 5 is usually tricky. It might be truncated and form a double top pattern or not even reach the previous high - 55.07. Which scenario we are going to see may depend on how successful the FED's rate cut would be. The FED's market regulation supposed to weaken the upcoming recession, but FED should not use their power to turn the recession into a new bull market. If FED overdoes the rate cut, we may see the scenario 2. With this scenario, by the end of the wave 5 FED will not have enough room for a new rate cut, and the next long-term downtrend would be even more severe.

QQQQ - Long-Term Trend

QQQQ Short-term technical analysis: Last weak we suggested that, if support holds, the QQQQ might reach the channel resistance. The QQQQ rallied from the support level and gained 3.73% for the week and reached 50.11 on Friday. The rally from 41.05 (3/17/2008) to 50.11 (5/16/2008) is close to Fibonacci 62% retracement. Weekly and daily Lane's Stochastic is overbought, while daily William's Percentage Range (W%R) is strongly overbought. MACD has bearish divergence. The rising channel resistance level is near 50.6. The resistance should hold, and the price might move down toward the support level 48.08.

QQQQ - Short-Term Trend

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QQQQ may reach the channel resistance level near 49.6

The Stock Market Week - 5/9/2008

Last week we suggested that short-term market outlook is negative All the major US indices were negative. For the week the Dow Jones Industrial Average dropped 312.32 points, or 2.39%. The Standard Poor''s 500 Index dropped 25.62 points, or 1.81%, while the Nasdaq Composite dropped 31.47 points, or 1.27%

Nasdaq Trend Analysis

QQQQ Long-term technical analysis: Our long-term outlook has not changed. We consider two possible scenarios: Scenario 1. The long-term uptrend (10/08/2002 - 10/31/2007) is over, and a new long-term downtrend started on 10/31/2007. The sub wave 2 (0/31/2007 - present) is currently in progress and almost completed. The sub wave 3 down should start soon and break the long-term support trend line around 43ᇀ, and then it'll go lower than the recent low of 41.05 and move down to about 35 in the late fall. Scenario 2. The long-term uptrend that started on 10/08/2002 is still in progress, with sub wave 5 currently in progress. The wave 5 is usually tricky. It might be truncated and form a double top pattern or not even reach the previous high - 55.07. Which scenario we are going to see may depend on how successful the FED's rate cut would be. The FED's market regulation supposed to weaken the upcoming recession, but FED should not use their power to turn the recession into a new bull market. If FED overdoes the rate cut, we may see the scenario 2. With this scenario, by the end of the wave 5 FED will not have enough room for a new rate cut, and the next long-term downtrend would be even more severe.

QQQQ - Long-Term Trend

QQQQ Short-term technical analysis: Weekly Lane's Stochastic is overbought. Daily MACD has bearish divergence. The price is near the short-term rising channel support line - 48.25. If support holds, the QQQQ may reach the channel resistance level near 49.6. This level is close to the Fibonacci 62% retracement. Overbought stochastic would make this resistance level pretty strong. If the price breaks the support line, the next support is at 46.6 and then around 45. The QQQQ may retest the long-term support around 42-43 as well. Overall risk/reward ratio is still pretty high.

QQQQ - Short-Term Trend

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QQQQ - MACD has bearish divergence

The Stock Market Week - 5/2/2008

It was an up week for the major markets. For the week the Dow Jones Industrial Average gained 166.34 points, or 1.29%. The Standard Poor's 500 Index gained 16.06 points, or 1.15%, while the Nasdaq Composite gained 54.06 points, or 2.23%. The QQQQ raised 3.44% for the week.

Nasdaq Trend Analysis

QQQQ Long-term technical analysis: Our long-term perspective includes two possible scenarios: Scenario 1. The long-term uptrend (10/08/2002 - 10/31/2007) is over, and a new long-term downtrend started on 10/31/2007. The sub wave 2 (0/31/2007 - present) is currently in progress and almost completed. The sub wave 3 down should start soon and break the long-term support trend line around 43ᇀ, and then it'll go lower than the recent low of 41.05 and move down to about 35 in the late fall. Scenario 2. The long-term uptrend that started on 10/08/2002 is still in progress, with sub wave 5 currently in progress. The wave 5 is usually tricky. It might be truncated and form a double top pattern or not even reach the previous high - 55.07. Which scenario we are going to see may depend on how successful the FED's rate cut would be. The FED's market regulation supposed to weaken the upcoming recession, but FED should not use their power to turn the recession into a new bull market. If FED overdoes the rate cut, we may see the scenario 2. With this scenario, by the end of the wave 5 FED will not have enough room for a new rate cut, and the next long-term downtrend would be even more severe.

QQQQ - Long-Term Trend

QQQQ Short-term technical analysis: In both scenarios the short-term perspectives are negative. Weekly Lane's Stochastic, daily Relative Strength Index (RSI) and William's Percentage Range (W%R) are overbought, and daily Lane's Stochastic is strongly overbought. Daily MACD has bearish divergence. Price is near the rising channel resistance line - 48.94. The chances are high that QQQQ will turn down soon.

QQQQ - Short-Term Trend

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QQQQ is retesting an important support level around 43.5 - 44

The Stock Market Week - 4/11/2008

All the major US indices were negative. For the week the Dow Jones Industrial Average dropped 284.00 points, or 2.25%. The Standard Poor's 500 Index dropped 37.57 points, or 2.74%, while the Nasdaq Composite dropped 80.74 points, or 3.41%. The Utilities sector was the strongest sector last week followed by the Energy sector. The Industrial sector was the worst performing sector of the week followed by the Financial sector. The Basic Materials is the most overvalued sector followed by Conglomerates sector, while the Independent Oil & Gas, Oil & Gas Drilling/Explor and Copper are among the most overvalued industries. For the second week in a row Utilities is the most oversold sector followed by the Healthcare sector, while the Dairy Products, Cigarettes and Publishing - Periodicals are among the most oversold industries.

Nasdaq Trend Analysis

QQQQ Long-term technical analysis: The QQQQ is in the first long-term wave down that started on October 31 2007. Weekly technical indicators are neutral. The price is near the long-term support trend line.

QQQQ - Long-Term Trend

QQQQ Short-term technical analysis: In our previous newsletter we have mentioned that the QQQQ had the Downtrend resistance alert. We suggested that it was a warning for a short-term rally weakening and the trend reversal may appear soon. The QQQQ turned down on April 7th. Last week the QQQQ lost 3.45%. Daily technical indicators are neutral. After the previous rally that broke the mid-term falling channel, the QQQQ is retesting the former trend line around 43.5 - 44. It has become an important support level.

QQQQ - Short-Term Trend

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The QQQQ downtrend resistance alert

The Stock Market Week - 3/28/2008

It was a mixed week for the major markets. For the week the Dow Jones Industrial Average dropped 144.92 points, or 1.17%. The Standard Poor's 500 Index dropped 14.29 points, or 1.07%, while the Nasdaq Composite climbed 3.07 points, or 0.14%. The QQQQ raised 0.93% for the week. The Materials sector was the strongest sector last week followed by the Energy sector. The Financial sector was the worst performing sector followed by the Consumer Discretionary sector. The Basic Materials is the most overvalued sector followed by Industrial Goods sector, while the Rental Leasing Services, Metals Fabrication and Railroads are among the most overvalued industries. Utilities is the most oversold sector followed by the Technology sector, while the Publishing - Periodicals, Dairy Products and Health Care Plans are among the most oversold industries.

Nasdaq 100 Trust Shares (QQQQ) Trend Analysis

QQQQ Long-term technical analysis: The QQQQ is in the final stage of the first long-term wave down that started on October 31 2007. Usually oversold long-term technical indicators and the spreading fear in the stock market characterize the final wave down in the long-term trend. The analysts' outlook for economy remains gloomy and mass media keeps spreading the fearful headlines. Weekly technical indicators are neutral.

QQQQ - Long-Term Trend

QQQQ Short-term technical analysis: Price is near the falling channel resistance. The channel resistance is usually stronger when appears with overbought technical indicators. Daily Lane's Stochastic is overbought. The QQQQ has the Downtrend resistance alert. This is a warning alert that a short-term rally is weakening and the reversal may appear soon.

QQQQ - Short-Term Trend

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The QQQQ is near the falling channel resistance line

The Stock Market Week - 3/21/2008

It was an up week for the major markets. For the week the Dow Jones Industrial Average gained 410.23 points, or 3.43%. The Standard Poor's 500 Index gained 41.37 points, or 3.21%, while the Nasdaq Composite gained 45.62 points, or 2.06%. The QQQQ raised 1.99% for the week. The Financial sector was the strongest sector after the Federal Reserve interest rates cut last week. The Materials sector was the worst performing sector of the week followed by the Energy sector.

Nasdaq 100 Trust Shares (QQQQ) Trend Analysis

QQQQ Long-term technical analysis: The QQQQ is in the final stage of the first long-term wave down that started on October 31 2007. The wave is forming the five waves structure and the final fifth sub wave might be in progress now. Usually the final wave down in the long-term trend characterized by oversold long-term technical indicators and the spreading fear in the stock market. Weekly William's Percentage Range (W%R) and Lane's Stochastic (%D-Slow) are oversold. The analysts' outlook for economy is gloomy and mass media spreads the fearful headlines. The fear forces investors to sell falling stocks near the market bottom. The next wave down may occur during the summer and fall of 2008 and take the market much lower.

QQQQ - Long-Term Trend

QQQQ Short-term technical analysis: ADaily technical indicators are neutral. The QQQQ current price 43.09 is near the falling channel resistance line (43.5 - 44.5). If resistance holds, the QQQQ may retest the recent low at 41.17.

QQQQ - Short-Term Trend

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