Wednesday, November 01, 2006

Quick take on QQQQs direction

Since everyone has the same question on their mind...where from now?
Looking at 9 months daily chart all I can see now is that QQQQs is sill in uptrending price channel, which started in mid August, I'm not going to post chart - you can see it by just using trendlines over the tops and bottoms since mid Aug. Since 10/13/2006 QQQQs begun consolidation ( before that it was on the upper part of channel with slams to work off overbought conditions ) never violating old (Apr/May) support of about 41.5. Tomorrow or within next few day I think QQQQs are going to touch lower band of the price channel and bounce right up. Why I believe it'll bounce and not fall through on the downside? I have argument for UP as much as for DOWN - we'll have correct answer by Nov 7th. I believe the answer is "UP"

I thought I still have to give you at least one of the reasons why "UP" - today's sell off in this year big winners ( SMSI is a case ) could be attributed to mutual fund fiscal year end, MF must provide shareholders report in 60 days after fiscal year eds, most convenient time for report is beginning of calendar year - we are right at the beginning of this 60 window, so sell off might continue for a day or two and then we are clear for take off