Thu Oct 11th 2007
Down-spike Not a Mere Dip
By Mike Paulenoff, www.MPTrader.com
Frankly, I am not surprised that the major equity market ETFs in general and the Q's (NASDAQ: QQQQ) in plunged to relieve some of the excessive overbought condition that has developed in recent days. However, the fact that the reversal emerged right at the top of the Aug-Oct trading channel, and right at the upside target measured off of the July-Aug base pattern suggests strongly to me that a meaningful first crack in the uptrend has occurred…likely within what will develop into a near-term topping process during the hours and days ahead. In other words, my work is telling me that this down-spike is NOT a dip to use to enter long positions. In any case, let's see whether the bulls or the bears command directional control during the final hour of trading.
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