QQQQ Trend Analysis - 11/03/2006

QQQQ Trend Analysis - 11/03/2006

For the week the Dow Jones dropped 104.22 points or 0.86% and closed the week below 12,000. The S&P 500 gave back 13.04 points or 0.95%. The Nasdaq Composite is down 19.83 points or 0.83% while QQQQ lost 1.12%.

Oscillators Trend Analysis Symbol Daily Weekly Daily Weekly 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: We did not discuss QQQQ trend for a while, so we would like to take a look at QQQQ chart now. 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 week 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 is still overbought on weekly time frame. The rally from July 18 formed a strong rising channel. The trend support line is almost broken. With strong long-term resistance at 43.05 - 43.31 area and overbought weekly technical indicators, chances are high that QQQQ will break the trendline support soon and move down to reset technical indicators.

QQQQ - Short-Term Trend

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