QQQ is Back Inside Its Blue Rising Megaphone Heading Back Down to Retest Its Bottom
NQ is back inside its blue rising megaphone heading back down to the formation bottom for a retest. Essentially NQ and PowerShares QQQ Trust Series 1 (NASDAQ:QQQ) are trying to put in a top before a dip as we head into a long holiday weekend. That makes the price action goofy.
If QQQ breaks through the blue rising megaphone bottom again, it will be completing a little head and shoulders B wave on the red megaphone VWAP. It can break out of that H&S for a move to 120ish to retest the breakout through the 2000 high. There’s another strong target at roughly 100, and if QQQ can break out through 100 the next target is at roughly 70.
If QQQ/NQ break through that bottom again, don’t be surprised if NQ triangles at the red megaphone VWAP through the holiday weekend.
QQQ could also get stuck in its red megaphone long enough to make a new all-time high within it (pink scenario).
And if the blue rising megaphone bottom holds on this retest, QQQ could head straight up to new all-time highs in a rising megaphone extension of the blue rising megaphone (purple scenario).
The faster QQQ tops here, the more likely it is to reverse in the 100-120 area for a huge move up. The longer it spends topping up here and the more extended the topping pattern gets, the more likely it is to head down into a deeper, longer-lasting correction.