Yesterday was catch up day for the blue chips. The Dow was up 170 points and the S&P 500 up 20. Tech heavy NASDAQ however remains out in front and considering that the 5-day end of the month buying spree should kick in by Friday, there remains a strong possibility we will see tech break out of its trading range soon.
Note the weekly QQQQ chart below. Two weeks ago it bounced off its 50-week average and long term trend line. Yesterday it closed just .34 below $39.50, a number which represents overhead resistance on its trading range. Its refusal to drop back to the lower support on its trading range betrays the fact that it has underlying strength. A weekly close over $39.50 will mean good times ahead for the bulls.
Today may give back some of yesterday’s gains. This market is once again climbing a wall of worry and a retracement of some of the gains will encourage the bears to get more aggressive again. This would be bullish since short covering combined with end of the month buying power could be the catalyst that pushes the QQQQ through overhead resistance.
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