Important Weekly Trend Test Today

Today is a very important day for the market, one which could make or break the near term bullish case. As you can see on the QQQQ (NASDAQ 100) chart below, $38 represents long time support, the trend it has been following since 2003. For the past two weeks support has held in this area and there are good reasons to assume that the price will hold here once again; not the least of which is the fact that end of the month buying should kick in today. On the other hand sell signals are flashing across the board after yesterday’s heavy retreat of the buyers. The market should bounce here, but we know that the market doesn’t always do what it should do, so we need to prepare ourselves for the other potential scenario that could develop out of a break down here. Should $38 give way this week, short set ups will be confirmed and we should look for the QQQQ to drop back to $36 over the next few weeks. Today is a great day to sit back and watch to see what develops out of this trend test.