Either the rally off of Friday's low at 25.71 to this morning's high at 26.80 in the PowerShares QQQ Trust (QQQQ) is another run-of-the-mill failed recovery bounce or it is a deceptive start of a potent rally period that has considerably more room to climb. Right now, the majority of my near-term work argues for the latter scenario, which if accurate should propel the Q's to an optimal target zone of 27.70-28.00 and possibly to 30.00 prior to completion. At this juncture, a decline that violates 26.00 will weaken the developing pattern, while a break of Friday's low will wreck it altogether.

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.