Directionless action might be broken soon

The QQQQ has show a somewhat directionless pattern in the last two weeks, which may lull many into thinking the correction has ended and we are working through a bottoming process. We think a more likely scenario is that the complacency will be shaken by a sudden downward move, spiking volatility upwards again and making many people think again that the market has bottomed.

Bear resumes after US Thanksgiving shortened week

There was something that seemed really fake about the rally last week. It began the previous Friday mid-session with the news that Geithner would be announced, which began the rally that lasted into last Monday and then Wednesday. The choppiness and shortened session on Friday made it difficult to trade, but it's safe to say after today's selling that the bear has returned. The large fundamental problems that exist in the economy cannot be ignored, and we expect a strong selling week.

Selling any rally proves profitable

Another selloff in the last hour...showing again that recent rallies should be used as an opportunity to sell into (last Thursday being an excellent example). QQQQ continues to look weak by all measures but we must be on the lookout for a strong bounce.

China stimulus fails to spark follow through of buying

The China stimulus steps were unable to keep the market propped up during the session, and selling resumed again. We believe this is the likely pattern that will take place in the near term, with rallies providing good opportunities to sell into the QQQQ. Earnings also seem to be weighing on the index, with Starbucks disappointing after hours on Monday.

QQQQ rally has stalled

The sharp rally in QQQQ last week appears to have faded today, and we would expect more weakness ahead. Investors should be in protection mode now and not listen to commentators who are saying stocks are cheap...they are not by any historical standards. Our apologies to our subscribers for our site problems recently, we are working hard with our new web host to resolve them.

Bounce unlikely to hold up

With technical indicators still basically broken as guidepost to help us, other factors in our model point to the suggestion that market strength should be sold into. We note that Texas Instruments is weak after hours on its earnings announcement which should weigh on technology stocks tomorrow.

One of the worst days for the market...ever

With the extraordinary selling on Monday, it has become clear that the "normal" methods used to forecast a stock average must temporarily be put on hold until the market begins trading with normal cycles. Subscribers who have followed our advice in September have not only been protected but also had the potential to make an approximately 33% return since September 3 using the QID unit. Picking the bottom with a market being potentially driven by the timing political passage of a bailout bill is not a sound way to invest and picking the bottom here will both be dangerous and tricky. There is the potential with the bailout bill's passage in congress later in the week, along with the September quarter ending (fund managers report their quarterly results), October might begin to mark some kind of bottom. We will be watching closely for signs of a turn but for now remain bearish.

Market can't get past underlying problems

With last week providing several shocks in either direction to the market, our hope was that this week would bring some stability to help forecast the future. However, today's selloff puts the momentum squarely with the bears, and is not likely to end anytime soon. A government bailout does not seem to be calming the markets which must still deal with a continuing housing problem, liquidity problems in the fixed income market, and high energy prices.

Extraordinary down day

You've seen all the headlines and don't need us to reiterate them, but needless to say the short side of the QQQQ trade is the place to be. With movement like today and the likely daily flow of market-moving stories, it will be tough to call a bottom with accuracy. Until we see any sign in our model giving us reason to change, we see continuing weakness ahead.

So much for the bailout...

Our idea that September could be shaky seems to be on track so far.  The enthusiasm about the Fannie / Freddie bailout quickly dissipated, and Tuesday's action showed lots of technical damage.  Lehman is now hitting with a potential implosion / discount sale, again stressing the financial system.  We will see how this shakes out, but our estimate is that there is much more trouble to come.

Fannie and Freddie bailout fail to inspire large tech

The big news surrounding Fannie and Freddie failed to inspire a weak QQQQ, finishing today's session down 0.14. While we always must be on the lookout for a potentially violent short squeeze, September has the feel of being particularly ugly for the broader stock indices at this point. We believe the housing problem in the US has a LONG way to go before washing out, with further credit and consumer spending pressure to come.

selling resumes

Monday saw a resumption of selling, after a week of choppy sessions that failed to deliver any real upside.  We believe this negative sentiment in the QQQQ should set the trend for coming sessions.

More earnings damage after the bell

After several important earnings misses / lowered outlooks from companies last week, we have had several more tonight, with Schering Plough, Merck, American Express, and specifically for those interested in the QQQQ,  Sandisk and Apple.  The QQQQ is already selling off over 1% after the bell tonight and should lead to weakness in the coming sessions.  We feel that there is a good potential for accelerated selling pressure in the near future.

Heavy selling

It is rare that a 4% move occurs in one day in the QQQQ, but this happened Thursday in heavy waves of selling.  Friday's open was pointing to some calm, but selling has resumed as we write this (9.46 am EST) and the index is down 25 cents.  There doesn't appear to be a bottom nearby for support.

New weakness trend in Nasdaq 100?

Although it took a while to play out, June seems to be marking the QQQQ for weakness ahead.  The index is having trouble getting any footing, and our model indicators are pointing to further problems in the index.

Monday reversal

Monday began with a continuation to the upswing seen last week in the QQQQ, but reversed during the session.  We think this will likely set a bearish tone for the rest of the week in the QQQQ.

Current topping process?

The current 'cosolidation' in the QQQQ on Friday and Monday's session could mark an important top.  Having been on a surge for several weeks, the QQQQ has outperformed the S&P aggressively recently and seems prime for a pullback.

More upside surprises - Google leads the way

Wednesday after hours, IBM and eBay reported what seemed like decent numbers, but were unable to inspire the QQQQ to the upside on Thursday.  After hours Thursday however, the market was treated to an "upside shock" with Google doing well.  GOOG was up over 17% and the QQQQ up almost 1.5% after hours, making for a strong Friday.

Upside surprises

Intel et al. surprising on the upside has the bulls back in control.  Although we don't expect this to have much staying power, for now the upside is the dominant theme in the QQQQ.

Selling resuming?

Monday's action combined with last Friday's strong selling seem to be pointing to a possible technical breakdown that could be strong in nature.  We believe the buying strength has dissipated and selling should again take over as the main theme in the QQQQ.

QQQQ holds on to gains stubbornly

After bouncing surprisingly strongly, the QQQQ has fallen only modestly since its peak last week.  We think this is likely to be short lived and selling pressure should resume soon.

Massive rally

It is unusual to see market action like Tuesday's, when the QQQQ rose almost 4%. The three previous sessions were putting our current long signal under pressure, with a sudden recovery yesterday. The rally appears to be carrying through to today. It is impossible to say whether Tuesday marked the bottom of an extended bull or just a short term wave, but we believe the long side is the place to be currently.

Early call to market bottom

Our call for a bottom was early based on the last three sessions, but information from both the QQQQ and a secondary index we follow closely, the Russell 2000, seems to be pointing to a near term market bottom.

Another weak day

After several sessions of positive ground, the QQQQ bucked the trend of the rest of the market and retreated 25 cents today. We believe the "rally" of the last few sessions has been very weak, and this was highlighted today. We seem to be on the cusp of strong selling in the index soon.

Rally fades again

Today, the US Fed acted again with another 50 point rate cut. Intially, the response was positive, with two surges that were quickly met by selling. The weakness in the last half hour of trading, again taking the market to negative territory for the session, shows the unsure footing the market is currently on, and we again believe more weakness is ahead.

Bottom reached Tuesday morning?

The 'panic' that has been sweeping Asian and European markets transferred to the US Tue morning after the Dr King break on Monday. The question is, was Tuesday morning the bottom for the QQQQ near term, or will this low be tested again?

The climb off the bottom during Tuesday's session led us to believe that this was indeed the low, and are predicting a market recovery over the coming days. However, Apple, a key component of the QQQQ, reported results after the bell Tue that disappointed, and at one point was down over 15% after hours. The obvious meaning of this is that it will negatively affect the QQQQ during Wednesday's session, however there have been cases before that one major company's negative results are dwarfed by a market surge in the other direction. It would not surprise us to see strength for the remainder of the week.

Key questions remain as to if this happens, how strongly it happens, and with what duration, so stay tuned, we are in for volatile sessions ahead.

Market downturn resumes

We took advantage of the recovery Wed and Thu to post a SHORT signal this morning. As the session wore on, more damage occurred, with the QQQQ finishing near the session lows. This sets up the possibility of severe damage next week, as in the last few weeks the market has had enormous difficulty finding a bottom. The recovery this week was very weak, although Wed showed "short squeeze" type action.

Market downturn to begin the year

The sessions after December 27th have been very weak, with the first sign of a short term bottom occurring only in today's session. At one point down substantially again, the Q's finished the session down 23 cents.

This appears to be the making of a short term bottom, with a weak rebound expected in the next few days. This would likely provide a selling opportunity in the next few sessions as we would then be entering the next leg of the downtrend.