October 1, 2009 (FinancialWire) (By Frank Kollar) — Shares of the ETF Powershares QQQ Trust (NASDAQ: QQQQ) managed to close with a one-penny gain in Wednesday’s volatile end of the quarter trading session.

The Q’s have been trading in a sideways pattern for two weeks, since September 16. There is one thing you can count on with such a pattern. It will not last long.

Using the highs and lows reached since the sideways trading began we can set support and resistance levels that can be used to trade the eventual breakout, either to the upside or downside, which will eventually occur.

A close above $43.17, the September 23 intra-day high, would be an upside breakout and call for a long trade, using a price just below the lows of the past two weeks, at $41.50, as a sell stop.

A close below $41.58, the September 25 intra-day low, would be a downside breakout and call for a short trade, using a price just above the highs of the past two weeks, at $43.25, as a buy stop.

This is a trade setup with a tight stop and limited risk. Once trade is profitable, use of a 4% trailing stop will keep trade active as long as the new advance or decline lasts. 

The Fibtimer.com (http://www.fibtimer.com) Stock Timing Strategy holds a position in the Powershares QQQ Trust.

Frank Kollar has been timing the financial markets since 1982, with online service since 1996. He is a dedicated trend timer and his strategies exited the markets before the crash in 1987 as well as the bear market in 2000 through 2002. During the 2000-2002 bear market, his bearish positions resulted in gains exceeding 100 percent, all achieved by trading trends.

Kollar’s research has shown that the financial markets are in tradable trends approximately 80 percent of the time. FibTimer strategies define trends and trade them in both advancing and declining markets. Caring nothing about what newscasters say or what the latest economic indicator predicts, trends are where the profits are, and that is where FibTimer is.

Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.

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