QQQQ has stayed below its 50 day moving average, but with strong support at 43, it is likely that the ETF will break back above this indicator very soon

The stock market has continued its sideways movement. It is still too difficult to tell if we have another short leg lower before the uptrend resumes or if the pullback has hit a bottom with the uptrend starting this week. We still feel it is more likely that the uptrend will resume this week.

QQQQ has stayed below its 50 day moving average, but with strong support at 43, it is likely that the ETF will break back above this indicator very soon. You can also notice the highlighted volume at the bottom of the chart. This pullback has had a large amount of downside volume, exactly what is needed to reverse a trend. This volume has likely exhausted the downtrend and the last few days have created a base before the next move higher. The bearish outlook is that the downtrend began on December 18th and the recent days have been a consolidation before the fall to the 42 area. Even in this negative scenario we don't see QQQQ falling below 42.

SMH is still in a trend channel. The 50 and 200 day moving averages seem to have had little effect on the price action the last several weeks. What is important is for the ETF to have a sustained break above the higher downtrend line. Following that break, we would expect a pause in both the 35 and 36 area. A break of 33 should push SMH to the lower support lines.

IWM has failed to push above 79 again. It is possible that a head and shoulder formation is being carved. The 50 day moving average is climbing and if support is not found on this indicator, we would expect support in the 77 area. A sustained break above 79 would suggest that the uptrend has resumed.

Happy Holidays from the Nasdaq Wizard Staff!