The QQQQ is pressing towards a 50% giveback of the prior 5-session upmove, at 27.25, which is the next significant support plateau beneath the November 25 pullback low of 27.52. If 27.25 does not contain the selling pressure, then we should expect downside continuation that fills the gap area from November 24 in the 27.00-26.65 target zone. However, the extreme oversold condition on a micro timeframe suggests strongly that an intervening rally could very well emerge that propels the QQQQ to 28.30/50 prior to another loop to the downside that fills the gap. Keep in mind that such a scenario,intervening rally and then another decline to fill the gap, all could occur between now and tomorrow morning, after which my short-term pattern work argues for upside continuation into recovery high ground.



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.