Invesco QQQ Trust Series 1 (QQQ)

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OT: Diminishing Selling Pressure?

by Bob Colby

On Friday, stock indexes resumed their minor corrections, falling to nine day-lows. Breadth confirmed price, with 1317 advances trailing 2009 declines on the NYSE. Short-term momentum indicators remain moderately Bearish.

Volume on the NYSE declined to 1.45 billion shares, its lowest level in nearly a month, indicating diminishing selling pressure.

Signs of significant technical damage are lacking at this point. The current minor correction in the S&P 500 is nearly the same size as the mid-February correction, and it has already retraced nearly half of the gain from 2/22/05 to 3/7/05. So far at least, this correction can be considered a normal, average minor pullback within the context of recent and normal patterns.

When recent unfavorable trends in bonds, oil, commodities, and the dollar halt or reverse, the stock market has a chance to at least attempt to reestablish its uptrend. Short-term traders will no doubt be watching these eternal markets for clues in days ahead.

Longer-term stock price trends remain Bullish. Economic and corporate earnings news remains mostly encouraging, and the trend toward mergers and corporate stock buybacks has been fueling speculative optimism and adding liquidity and buying power to reinvestment money flows. World stock markets are still in Major Uptrends. These forces are supporting continuing uptrends in the longer-term time frames.