August 24, 2010
Shares of the ETF Powershares QQQ Trust (NASDAQ: QQQQ) are starting to add up a bunch of negative indicators, forecasting lower lows in coming weeks.
On Monday, August 23, the Q’s rallied at the open and then spent the rest of the day erasing the gains and finally closing lower. The day was a bearish outside trend continuation day. This indicator is triggered when there are higher highs and lower lows than the preceding day’s trading range and the close is also lower than the previous day’s close.
Monday’s close, at $44.48, was at exactly the 50% retracement of the July to early August rally.
The Q’s are now below its 50-day moving average as well as its 200-day moving average.
The 50-day average has crossed below the 200-day average, a bearish indicator.
The Q’s should decline to the 61.8% retracement support level at $43.84 in coming days. How it does there will likely determine its future near-term direction which could easily see a test of the $42 correction lows if it is broken.
The Fibtimer.com (http://www.fibtimer.com) ETF Timing Strategy holds a position in the Powershares QQQ Trust.
Disclosure: The Fibtimer.com (www.fibtimer.com) ETF Timing Strategy holds a position in the Powershares QQQ Trust.