Nasdaq 100 Flashing A First Red Light

The technology space as measured by the Nasdaq 100, PowerShares QQQ etf, has had a great and relentless run thus far in 2013, currently shining with a roughly 20% gain.  As we are now however in the thick of a seasonally tricky period (second half of September through October) the going may just get a little tougher in the near-term, despite a recent break to new highs.

The long-term picture of the PowerShares QQQ etf shows much more massive performance off the late 2008/early 2009 double bottom.  Since 2011 however the index etf has traded within a defined and narrowing range, the top of which it once again tested in recent days.

qqq multi year

After Monday’s (September 16th) upside gap to fresh 2013 highs, both the broader market as well as the Nasdaq 100 gave back at least some of those gains by end of day.  The PowerShares QQQ etf looked the weakest as it managed to close in the red for the day, thus marking its daily chart with a very visually bearish outside day candle.  Before getting all beared-up from just one bearish reversal day however, let me state it clearly that in order  for me to become more concerned for longs and possibly even play the shorts side of the Nasdaq 100, a follow-through selling day would be needed in coming days.  Such follow-through selling would thus be a confirmation of Monday’s intra-day bearish turnaround.  Furthermore, as long as the QQQ remains trading above its $77.30 breakout level from September 9th, it remains positioned for further highs.

qqq daily chart

Yahoo! Inc, a component of the Nasdaq 100 also staged a nice breakout past near-term resistance last week.  Ever since however the stock has left a couple of worrying marks by way of bearish candlesticks on its daily chart, all of which is occurring right at the stock’s year to date highs.

I am not trying to get too bearish here, but Monday’s intraday turnaround to the downside is at the very least something worth noting for now.





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