I normally analyze charts of SPY but today I decided to take a look at QQQQ instead. You will see from the chart below (click to enlarge) that the short and intermediate trend is not positive for QQQQ, as gauged by the fact that it is trading below the 20 and 50 day moving average.
In addition, it has fallen below the upward sloping channel, the 20 day moving average is now sloping down and the 50 day moving average has flattened and will most likely be falling soon. Adam Hewison of MarketClub notes in this video that we are currently in "thin air" and his support point for the Nasdaq Composite over the next few months is 1671-1796 which would be a very healthy pullback.
For right now, the long term trend is still in place as QQQQ is trading above the 200 day moving average, however, the easy money was made in 2009 and the short-intermediate is a high risk situation for any bulls. In my opinion investors will need to be more selective with their stock positions and nimble with their trades in 2010.
On December 15th, I suggested investors in SPY tighten stops and not be afraid to take profits. The current sell-off could simply be a consolidation at which point the next leg up will begin. However, I would not expect the easy profits of 2009 to come so easily in 2010.