In a "normal" market environment, if the QQQQ exhibited the current technical set-up that shows a glaring positive momentum divergence, the form of a completed downleg from the August 15 high at 48.57 into the morning's low at 41.41, and a rally today that has subdivided into what I interpret as a bullish "recovery form," I would be very enticed to enter a new long position. In fact, our model portfolio is long based on the explained technical set-up. However, we all know that this is not a normal market. It is anything but a normal market, which relegates our long position to more of a wild crapshoot. Nonetheless, regardless of AIG, the Fed, and panic selling pressure emerging immediately after any rumor or story, I need to "call 'em as I see 'em." My near-term work argues against beng short right here, right now, and in favor of a long position.



Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.