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.