Sunday, June 29, 2008

The QQQQ is forming a new falling channel

The Stock Market Week - 6/27/2008

All the major US indices were negative. The Dow Jones Industrial Average was the weakest among the major market indices. It closed on Friday at the lowest level since September 7, 2006. For the week the Dow Jones Industrial Average dropped 496.18 points, or 4.19%. The Standard Poor's 500 Index dropped 39.55 points, or 3.00%, while the Nasdaq Composite dropped 90.46 points, or 3.76%.

The Energy sector was the strongest sector last week followed by the Health Care sector. The Financial sector was the worst performing sector of the week followed by the Industrial sector.

The Conglomerates and Financial are the most oversold sectors, while Regional-Southeast Banks, Sporting Goods, Housewares Accessories, and Appliances are among the most oversold industries.

The Basic Materials and Utilities are the most overvalued sectors, while Beverages-Brewers, Gas Utilities, Metals Fabrication, and Oil Gas Drilling/Explore are among the most overvalued industries.

Nasdaq Trend Analysis

In our previous QQQQ analysis on June 20th, we suggested that "the weekly Lane's Stochastic falls below 80% level, and %K line falls below %D. Both signs are usually considered as a sell signal". It was a negative week for the QQQQ. The QQQQ lost 3.73% for the week.

QQQQ Long-term technical analysis:
Our long-term outlook has not changed. We consider two possible scenarios:

Scenario 1.
The long-term uptrend (10/08/2002 - 10/31/2007) is over, and a new long-term downtrend started on 10/31/2007. The sub wave 2 (0/31/2007 - present) is currently in progress and almost completed. The sub wave 3 down should start soon and break the long-term support trend line around 43ᇀ, and then it'll go lower than the recent low of 41.05 and move down to about 35 in the late fall.

Scenario 2.
The long-term uptrend that started on 10/08/2002 is still in progress, with sub wave 5 currently in progress. The wave 5 is usually tricky. It might be truncated and form a double top pattern or not even reach the previous high - 55.07.

Which scenario we are going to see may depend on how successful the FED's rate cut would be. The FED's market regulation supposed to weaken the upcoming recession, but FED should not use their power to turn the recession into a new bull market. If FED overdoes the rate cut, we may see the scenario 2. With this scenario, by the end of the wave 5 FED will not have enough room for a new rate cut, and the next long-term downtrend would be even more severe.

"This will probably not prove to be the final bottom" said billionaire George Soros, referring to the rally in stocks after JPMorgan Chase agreed to buy Bear Stearns on March 17. He added that the rebound might last six weeks to three months as the US moves closer to a recession.
QQQQ - Long-Term Trend
Technical Stock Market Timing System
QQQQ Short-term technical analysis:
Weekly rising channel (March 17 – June 5) is broken. The new falling channel is forming, and the price is near the channel support. Daily William's Percentage Range (W%R) and Lane's Stochastic (%D-Slow) are oversold. Broad market is oversold on daily and weekly bases. 133 members of Standard Poor's 500 Index are oversold, while only 4 overbought. The sharp decline might pause soon, and QQQQ may move up toward the weekly falling channel resistance. The next QQQQ long-term support is near 44.
QQQQ - Short-Term Trend
Technical Stock Market Timing System
Presented by www.thegreedytrader.com Research Group.

Sunday, June 22, 2008

For the week Nasdaq Composite dropped 1.97%

The Stock Market Week - 6/20/2008

All the major US indices were negative. For the week the Dow Jones Industrial Average dropped 464.66 points, or 3.78%. The Standard Poor's 500 Index dropped 42.10 points, or 3.10%, while the Nasdaq Composite dropped 48.41 points, or 1.97%. For the last several month the Nasdaq Composite index outperformed the Dow Jones and Standard Poor's 500 Indices.

The Energy sector was the strongest sector last week followed by the Utilities sector. The Consumer Discretionary sector was the worst performing sector of the week followed by the Financial sector.

Basic Materials is the most overbought sector followed by Utilities, while Gas Utilities, Metals Fabrication, and Oil Gas Pipelines are among the most overbought industries. The Financial is the most oversold sector followed by Consumer Goods, while Regional-Southeast Banks, Appliances, and House wares & Accessories are the most oversold industries.

Nasdaq Trend Analysis

It was a negative week for the QQQQ. The QQQQ lost 1.96% for the week. In our previous publication on May 30th, we suggested that the QQQQ downtrend might resume soon. The QQQQ had reached 50.61 on June 5th and turned down, loosing more than 6.3% since then.

QQQQ Long-term technical analysis:
Our long-term outlook has not changed. We consider two possible scenarios:

Scenario 1.
The long-term uptrend (10/08/2002 - 10/31/2007) is over, and a new long-term downtrend started on 10/31/2007. The sub wave 2 (0/31/2007 - present) is currently in progress and almost completed. The sub wave 3 down should start soon and break the long-term support trend line around 43ᇀ, and then it'll go lower than the recent low of 41.05 and move down to about 35 in the late fall.

Scenario 2.
The long-term uptrend that started on 10/08/2002 is still in progress, with sub wave 5 currently in progress. The wave 5 is usually tricky. It might be truncated and form a double top pattern or not even reach the previous high - 55.07.

Which scenario we are going to see may depend on how successful the FED's rate cut would be. The FED's market regulation supposed to weaken the upcoming recession, but FED should not use their power to turn the recession into a new bull market. If FED overdoes the rate cut, we may see the scenario 2. With this scenario, by the end of the wave 5 FED will not have enough room for a new rate cut, and the next long-term downtrend would be even more severe.

"This will probably not prove to be the final bottom" said billionaire George Soros, referring to the rally in stocks after JPMorgan Chase agreed to buy Bear Stearns on March 17. He added that the rebound might last six weeks to three months as the US moves closer to a recession.
QQQQ - Long-Term Trend
Technical Stock Market Timing System
QQQQ Short-term technical analysis:
All weekly and daily technical indicators are neutral now. The weekly Lane's Stochastic falls below 80% level, and %K line falls below %D. Both signs are usually considered as a sell signal. Lane's Stochastic signals should be considered in conjunction with other factors. At this point the strength of the downtrend will show if scenario #1 or #2 is in progress.
QQQQ - Short-Term Trend
Technical Stock Market Timing System
Presented by www.thegreedytrader.com Research Group.

Sunday, June 01, 2008

The QQQQ is retesting the rising channel support

The Stock Market Week - 5/30/2008

It was an up week for the major markets. For the week the Dow Jones Industrial Average gained 158.69 points, or 1.27%. The Standard Poor's 500 Index gained 24.45 points, or 1.78%, while the Nasdaq Composite gained 77.99 points, or 3.19%.

The Technology sector was the strongest sector last week followed by the Industrial sector. The Energy sector was the worst performing sector of the week followed by the Financial sector.

Nasdaq Trend Analysis

Last week we expected that the QQQQ might see a brief rebound or pause. It was a positive week for the QQQQ. The QQQQ raised 3.76% for the week.

QQQQ Long-term technical analysis:
Our long-term outlook has not changed. We consider two possible scenarios:

Scenario 1.
The long-term uptrend (10/08/2002 - 10/31/2007) is over, and a new long-term downtrend started on 10/31/2007. The sub wave 2 (0/31/2007 - present) is currently in progress and almost completed. The sub wave 3 down should start soon and break the long-term support trend line around 43ᇀ, and then it'll go lower than the recent low of 41.05 and move down to about 35 in the late fall.

Scenario 2.
The long-term uptrend that started on 10/08/2002 is still in progress, with sub wave 5 currently in progress. The wave 5 is usually tricky. It might be truncated and form a double top pattern or not even reach the previous high - 55.07.

Which scenario we are going to see may depend on how successful the FED's rate cut would be. The FED's market regulation supposed to weaken the upcoming recession, but FED should not use their power to turn the recession into a new bull market. If FED overdoes the rate cut, we may see the scenario 2. With this scenario, by the end of the wave 5 FED will not have enough room for a new rate cut, and the next long-term downtrend would be even more severe.

"This will probably not prove to be the final bottom" said billionaire George Soros, referring to the rally in stocks after JPMorgan Chase agreed to buy Bear Stearns on March 17. He added that the rebound might last six weeks to three months as the US moves closer to a recession.
QQQQ - Long-Term Trend
Technical Stock Market Timing System
QQQQ Short-term technical analysis:
Weekly William's Percentage Range (W%R) is strongly overbought and Lane's Stochastic is overbought, while daily technical indicators are neutral. The price is retesting the rising channel support.
In our previous publication last week we expected the QQQQ brief rebound or pause. If long-term scenario #1 is in progress, then the downtrend may resume next week.
QQQQ - Short-Term Trend
Technical Stock Market Timing System
Presented by www.thegreedytrader.com Research Group.