QQQQ Watch

The exchange-traded fund that tracks the Nasdaq, QQQQ, shows a parabolic sar bull signal after a gap up at Monday's open and then range trading for two straight days.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
QQQQ $47.80

At 3:04 p.m. Eastern

The bull signal is in line with an upward trend that began in November 2008, and with the most recent swing that began in February last.

(Note that DIA is also showing a psar bull signal, with similar price patterns.)

The chart and the technicals are a bit bizarre, as seems to be the case throughout the markets these days.

The mini-panic of May 6 sent the price to down below the beginning of the most recent upswing. That lower low sets things up, by the book, for a downtrend.

However, if you treat the panic as an artifact of illiquidity caused by poorly thought out assumptions built into software -- i.e., rogue robots whose masters are about 68% worth of dumb -- they should go back to their home planet and leave us Earthlings alone -- then you'll ignore that low and work instead with the next day's low. The latter method produces a higher low, and bingo!, we transformed a downtrend into an uptrend through the magic of -- wishful thinking?

I don't know. The charts are strange these days. Deal.

Reversal Levels

• $50.65, +6%
• $48.39, +1.2%
• $47.80 <==You are here.
• $46.80, -2.1%

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Martin Pring's detailed deconstruction of the economic cycle: What sorts stocks to look for at each stage of the recovery. A masterful analysis.

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Skynet Panic of May 6
Panic Looks Like This
Skynet Panic Poisons Technical Tools

Abbreviations:
psar - Parabolic Stop and Reverse
adx - Average Directional Index
pps - Person's Proprietary Signal
ma20 - 20-day moving average
macd - Moving Average Convergence-Divergence
mfi - Money Flow Index
sto - Fast Stochastic

About the glance: The colors indicate the state of each signal.

• trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
• adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
• psar, pps, macd: green for bull mode, red for bear
• sto: green for overbought, red for oversold, yellow for the neutral zone.

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