Tuesday, 23 October 2012

Quick Technical Charts - S&P and QQQ - Well...that was fast!

Its been a relatively wild roller coaster ride on the stock market for the last few weeks.  A quick look at the S&P chart below shows the wild triple peak swing over the last 2 months.  Whats unique this week is that the S&P finally broke down through its 50 DMA that it rebounded from last week AND it broke through the support level of 1430 that held previously.  While there is another support at 1400, there is a definite negative trend occurring. 

The Nasdaq 100 ETF QQQ is much worse off.  Unlike the S&P which is only 3.5% off its highs, QQQ is off by over 7%.  That's approaching the 10% normally used for corrections.  Tech has been incredibly beaten up lately and is within a hair's breadth of hitting its 200 DMA of 64.77.  I would expect that point to hold for at least a short time.  Depending on earnings news, it could drop down to its old support levels in the 61-64 range.  Regardless, if you're a very long term buyer, now's not a bad time to start cost averaging into QQQ at least a little bit.

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