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By Mike Paulenoff, MPTrader.com
Purely from a near term technical perspective, if I look at the pattern in the Q's (NASDAQ: QQQQ), the downleg from the 7/31 high at 46.12 to yest.'s low at 44.30 has its 50% recovery resistance plateau at 45.21, with the 62% recovery resistance plateau at 45.43. An upside hurdle of the former likely will lead to a challenge of the latter, which my work argues SHOULD put a lid on this advance IF A NEW DOWNLEG IN THE Q's STARTED UP AT 46.12.
Based on the inverse ETF, the QIDs, a 50% "correction" of the upleg that started at the 7/31 low of 42.68 into yest.'s high at 46.19 represents a decline into the 44.45/40 area, while a 62% retracement of the upleg will imply weakness into the 44.00 area prior to a resumption of the dominant (up) trend.
Thus far, the Q's have tested-- and so far have held- at the 50% resistance plateau of 45.20, while the QID's so far have held in the vicinity of the 50% support level of 44.45/40.
Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!
