Frankly, I am not surprised that the major equity market ETFs in general and the Q's (QQQQ) in particular 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.



Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.