Short Term Trading Member Forum

[frenchee]

QQQ's Long-Term Trend

QQQ closed this month at 34.02 and the final action limit using my long-term investing model is 33.99. Therefore, QQQ is in a long position relative to my long-term investing model--but it's hanging by a thread. I don't trust this model long-term bullish position since the weight of the technical evidence suggests otherwise. Stepping back from the model and reading the tea leaves, let's examine five key technical clues. First, we are trading in the lower half of the Bollinger Bands which implies a target at the lower band and resistance at the 13 month EMA inside the bands. Second, QQQ has not held support at the 23.6% retracement level from the Jan 04 high. A breach of a retracement level forecasts a move to the next retracement level before support is expected. Third, the price trend during the last seven months is down as indicated by the Raff Regression Channel's negative slop. Fourth, this is the second consecutive month the Parabolic SAR dot is above QQQ's monthly closing price suggesting to be short the market. Fifth, price support is not showing until the Nov 03 monthly high around 28.80. My conclusion is high near-term price volatility with a strong bias in the negative direction.

http://img8.imgspot.com/u/04/244/03/QQQmonthly083104.jpg