- Technical Commentary -

August 28, 2009 (FinancialWire) (By Frank Kollar) — Considering the gains already achieved by stocks over the past months, looking for another rally may seem farfetched. But that is what we are watching for. Though we have not heard it discussed much on financial news shows, both the S&P 500 SPYDRS (NYSE: SPY) and Powershares QQQ (NASDAQ: QQQQ) closed at new rally and new 2009 highs on Thursday, August 27.

Both the indexes tracked by these ETFs, the S&P 500 Index (SPX) and Nasdaq 100 Index (NDX) also closed at new highs. New closing highs are always bullish and Thursday’s highs came after a punishing selloff in the early hours of the trading session.

With the caveat that a sell stop is always important and no forecast can be considered as “in the bag” the targets for coming weeks are:

For the SPY, the target for this advance is 112.27, 8.6% above current levels. This is the 50% retracement level for the entire bear market decline.

For the QQQQ, the target for this advance is 43.61, 8.9% above current levels. This is the 61.8% retracement level for the entire bear market decline. The Qs have already surpassed the 50% retracement.

If we do move lower, initial strong support should be found around SPX 848 which is the 50-day moving average for this big cap index (for the SPY the 50-day moving is at about $85.00).

(The http://www.fibtimer.com ETF Strategy has a position in the S&P 500 SPYDRS and the Powershares QQQ.)

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