Invesco QQQ Trust Series 1 (QQQ)

[frenchee]

U.S. Stock Market Update by Robert Colby
posted Wednesday, October 12, 2005,
at 6:45 p.m. EST

A Bad Break

On Wednesday, the stock market again tried to rally after the open, but the rally didn’t last 20 minutes. The S&P 500 Index fell 7.19 (0.61%) to 1,177.68. The S&P broke below the following support levels:

1,181.92, low of 10/6/2005
1,175 to 1,179, early May resistance
1,173.80, low of 5/18/2005

By breaking and closing below 1,181.92, the S&P 500 is under its 1 x 2 weekly Gann Angle rising from the important low of 1,060.72 set on 8/13/2004. That might prove to be critical, in my interpretation. It seems to suggest greater (possibly much greater) downside risk. A full test of the April low seems quite possible.

The Nasdaq Composite fell more, down 23.62 (1.15%) to 2,037.47, a new 5-month low. The Nasdaq has been underperforming recently, and that tends to be Bearish for the general market.

Breadth and volume ratios again confirmed a Bearish trend.

The S&P and DJIA also have broken their ordinary uptrendlines rising from bottoms set in August and October 2004. Why is that important? Because the rise over the past year or so appears to be Wave 5, the final upwave in the Bullish market recovery that started in 2002, according to my interpretation of Elliott Wave Theory. If Wave 5 is over, as seems likely to me, then this is a Bear Market.