Option Investor
Market Updates

QQQ alert hit

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This morning we suggested shorting/putting the QQQ's on a break below $49.36 on Indexskybox.com. Prices have fallen to $48.58, and violated the 50% retracement bracket. The MACD has had the bearish crossover that we were hoping for, but the 50-period moving average is giving us a fight.

Nasdaq-100 Index (QQQ) - 60-minute chart

Prices have also closed the gap formed back on 3/6/01, but we need help from bonds to push prices past the 50-period moving average. If that happens, we shouldn't have trouble reaching our target of $45. Should prices reverse quickly, keep an eye on our stop at $50.75. As usual, we'll also be watching bond YIELDS which continue to fall, suggesting there must still be a reason for the MARKET to prefer YIELDS of 5% over many stocks that have fallen 70% since September of last year.

Jeffrey Canavan
Assistant Analyst

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