A Closer Look at the QQQQs

As a way of getting back on track about what's happening in the markets after my vacation, let's take a closer look at the QQQQs



Above is the 5-year chart of the QQQQs in weekly increments. Notice the index has broken two key trend lines -- the upper trend line of the 4 year channel that started at the beginning of 2004 and the trend line that started in mid-2006.



Above is a 1 year daily chart that shows the severity of the trend break.



The above chart shows that in addition to breaking two upward sloping trend lines, the index is clearly in a lower lows and lower highs formation right now. The arrows show the minor up and down trends.



On the six month chart, notice the following:

-- The index is below the 200 day SMA.

-- The 10, 20 and 50 day SMA are all moving lower.

-- The 10, 20 and 50 day SMA have crossed below the 200 day SMA.

-- The shorter SMAs are below the longer SMAs

-- While prices have moved above the 10 day SMA, they have so far met resistance at the 20 day SMA.



Before I left for vacation, I wrote that I was expecting a bear market rally. The Fibonacci levels indicate possible levels where prices might rebound.

So, the short version of all this is the QQQQs are still in a bear market. Prices are below the 200 day SMAs, prices have sold off pretty heavily since their top last year, and shorter SMAs are below the longer SMAs.