April 20, 2010
Shares of the ETF Powershares QQQ Trust (NASDAQ: QQQQ) surpassed a strong resistance level that had held gains in check since March 25. That resistance level was at the bear market rally high of $48.57 reached on August 15, 2008.
But this time there was another resistance level ahead, at $50.61 which was the bear market rally high reached on June 5, 2008. This was the high point reached in the most powerful bear market rally of 2008 and as such it marked another strong level of resistance.
Sure enough, after several days of rally, the Q’s reached to just below $50.61 and this time, instead of powering through, the Q’s reversed hard on Friday, April 16.
On Monday, April 19, the Q’s made up some of the lost ground in an unexpected rally after most global markets had already closed with early week losses. This sets the stage for a possible run to test the $50.61 resistance level a second time.
A close above $50.61 would be extremely bullish, pointing to a potential test of the highs reached back in 2007.
Disclosure: The Fibtimer.com (www.fibtimer.com) ETF Timing Strategy holds a position in the Powershares QQQ Trust.