Nasdaq Qs (NASDAQ: QQQQ) Hold at Support Says Market Timer Frank Kollar

July 10, 2009 (FinancialWire) (By Frank Kollar)

The Nasdaq 100 ETF, Powershares QQQ Trust (NASDAQ: QQQQ), had a harrowing three day selloff that may have ended on Wednesday.

The Qs dropped some 5% in trading from Friday to Tuesday. Enough to close lower than the previous selloff that ended June 23 and establish a possible new downtrend.

On Wednesday the Qs held with a slight gain after reaching new intra-day lows and on Thursday, they again finished with a gain.

This is not exactly bullish, but it does have several potentially bullish things going for it.

First, the lows on Wednesday reached the Fib 61.8% retracement of the May 13 to June 11 rally. This is a critical support level and one where reversals, if they are going to occur, typically take place.

Second, the lows create a corrective ABC pattern with Wave A on June 23, Wave B on July 1 and the July 8 lows being Wave C. The Wave C is at a logical support level as mentioned above.

This is not enough to say a rally is ahead, but it does point to a potential reversal and rally. A decisive close below $34.50 would dash these hopes and point to lower lows. Friday’s trading may very well be the turning point.

The http://www.fibtimer.com ETF Strategy has a position in the Powershares QQQ Trust.

Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.

Kollar’s research has shown that the financial markets are in tradable trends approximately 80 percent of the time. FibTimer strategies define trends and trade them in both advancing and declining markets. Caring nothing about what newscasters say or what the latest economic indicator predicts, trends are where the profits are, and that is where FibTimer is.

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