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Nasdaq-100 Trying to Bounce

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The Nasdaq-100 (QQQ) is trying to bounce, but it may only have the bounce of a half-inflated basketball.

Nasdaq-100 60-Minute Chart

The triple Qs dropped right down to prior lows at $44 yesterday, and is trying to move higher today. The move is struggling, after the Qs have fallen 70 cents off their highs. We can now monitor today's high of $45.42, and today's low of $44.39 for some directional clues. If this last hour of trading is any indication, we could just hover around $45 for the remainder of the day. Looking ahead, and using a little imagination, we can see a possible head and shoulders top forming. This particular monster would have two left shoulders, with the May high being the tip of the head. With the summer doldrums quickly approaching, prices could amble between $44 and $49, and slyly form the two right shoulders of the pattern. Then again, it could just be my overactive imagination, so we'll just keep that on the back shelf for now.

Nasdaq-100 Winners and Losers

Looking at the components of the Nasdaq-100 doesn't really give us any insight today. Advancers have the edge on decliners, 68 to 21, and Internet stocks like Yahoo (NASD:YHOO), and Amazon (NASD:AMZN) are doing there part to pull the Nasdaq higher. Qualcomm (NASD:QCOM), WorldCom (NASD:WCOM), and Ericsson (NASD:ERICY) are amongst the losers, making telecommunications look bad, but Nextel (NASD:NXTL) is going its own way, up 1.05. If Microsoft (NASD:MSFT) and Qualcomm can reverse their declines, perhaps we can get above today's high.

Jeffrey Canavan
Assistant Analyst

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