Important Level for the QQQQ's

The Nasdaq has been the strongest index over the past few weeks. Below is a chart of key levels and a couple of scenarios that could play out over the next few days.

Breaking down the QQQQ's, we can look at some of the industries that have been performing the best.

HHH- Internet Holders

This group has been strong that the overall market, show by it's relative strength line. I would watch the stochastic oscillator however. It is overbought and has signaled a correction 3 out of four times over the past 3 months.

YHOO is the same story

It has essentially made the same move that the Internet ETF has made. As I pointed out, I would rather buy on a pullback than try to play a breakout. False breakouts occour frequently in Bear Markets and can be costly to your P/L.


The Biotechs are another group inside the Nasdaq that has been strong lately.

IBB- Nasdaq Biotech Index

Lastly I'll finish up with the Semiconductors.

SMH- Semiconductor HOLDRS

The Chip names have moved along with the QQQQ's. The thing that is interesting about this group is the increased volume on the pat couple of up days. It's downtrend line will provide some resistance, but the real test will be taking out it's January high.