Volatility but No Trend for Powershares QQQ Trust (NASDAQ: QQQQ) Says Market Timer Frank Kollar

May 11, 2010 (FinancialWire) (By Frank Kollar)

Shares of the ETF Powershares QQQ Trust (NASDAQ: QQQQ) lost 5.8% on Thursday through Friday last week, with intra-day lows at much lower levels. On Monday, May 10, the Q’s gained 5.2%. What’s next for this volatile and widely traded ETF?

The Q’s losses last week, whether caused by an errant trade, a computer program error, or whatever, began after the Q’s were already below their 50-day moving average and nearing their 200-day average.

The Q’s were also below two important levels, the June 5, 2008 bear market rally high at $50.61 and the August 15, 2008 bear market rally high at $48.57. The June level reversed a long running advance but the August level, which was near the 50-day moving average, should have offered support. It did not.

Now the Q’s are below all these levels and though they had a huge rally today, the possibility of a resumption of the selling is very real.

Maybe it would be asking too much, but the losses were not erased today.

There is no safe way to make money in the market. Every trade carries huge risk. We would stay in cash until a trend develops and then enter in the direction of the trend.

The Fibtimer.com (http://www.fibtimer.com) ETF Timing Strategy holds 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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