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As of 2:00 today, the stock market has just mildly improved since our last commentary. QQQQ is in the same situation it was in last week, while SMH and IWM have shown some improvement. The improvements in these ETFs are small enough that it is still possible that the correction that started the middle of December is not over.
Just like last week, QQQQ is still under its 50 day moving average. The ETF had a nice break above the average last Wednesday, but has retreated ever since. Support is still being held right underneath the 43.50 area, suggesting that it is possible that a bottom will be formed here. It is also possible that Thursday's high ended the incline that started January 22nd and started a second and final leg down. If this is true, we still see the ETF finding support just slightly below the 43 area. Any fall should be able to stay above 42, although at this point we find it highly unlikely that QQQQ would fall this far.
SMH has improved a bit since last commentary. So far, it has been able to stay above its 200 day moving average. The 50 day is right overhead and likely causing resistance at this point. A clear break of the 50 day moving average should bring SMH to its recent highs above 35.
IWM has also improved. It broke above its 50 day moving average last week and has been able to stay above it. Its all-time resistance in the 79 area continues to stop the uptrend. A sustained break of this area will suggest that a new leg higher has begun and that QQQQ and SMH will be continuing higher as well.
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