- Technical Market Commentary -

January 20, 2011 (FinancialWire) (By Frank Kollar) (Go to http://www.financialwire.net/?s=cmmtry for all recent commentaries.) — In yesterday’s trading, the PowerShares QQQ Trust (QQQQ – NASDAQ) reached both a higher intra-day high and a lower intra-day low than the previous day’s session, then ended the day closing near its intra-day low. Such a trading pattern is considered a “bearish outside reversal,” and typically such trading days are followed with more losses.

The stock market, and certainly the QQQ Trust, has been moving higher with almost no let-up for two months. The Nasdaq 100 Index (^IQX) is very overbought, and has been due for a correction. And this may be the start of that correction.

The Q’s has strong support at the $55.03 level, which was the high reached back on October 31, 2007. A decisive close below that level would point to this being the beginning of a corrective period that would probably continue for several weeks. If we instead see a reversal to the upside, at or above $55.03 per share, that would signal a likely resumption of the rally.

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Exchange Links: PowerShares QQQ Trust (QQQQ – NASDAQ)

(Go to http://www.financialwire.net/2010/05/01/about-kollar/ for more about Mr. Kollar, and go to http://www.financialwire.net/?s=kllrfby for more of Kollar’s commentaries.)

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Disclosure: Frank Kollar’s Fibtimer.com (http://www.fibtimer.com/) ETF Timing Strategy has a position in the PowerShares QQQ Trust.

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