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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