Sage Investment Club

The past three months have been torture for the Invesco QQQ Trust (QQQ), the ETF that tracks the NASDAQ 100. The large-cap stocks that dominate the QQQ performance have been breaking down one after another, and that has weighed much more heavily on the NASDAQ 100 than it has on the S&P 500 index, as the latter is much more diversified over 500 large, multinational companies. The breakdowns of Apple (AAPL), (AMZN), and Tesla (TSLA) have really taken a toll, while weakness in other key stocks like Alphabet (GOOGL) has added to the weakness in the QQQ.The current head-and-shoulders (H&S) pattern in the QQQ is a bearish continuation pattern, but, in the short-term, today’s bounce off major neckline support could help to propel the QQQ higher and into a possible right shoulder top over the next week or two. Check this out:The H&S pattern is not confirmed until the neckline is broken. So it’s quite possible that QQQ simply rallies off today’s neckline support test. The alternative, a breakdown below the neckline, would be quite bearish, especially if accompanied by heavy volume, and certainly increase the odds of much further weakness ahead.I look forward to seeing you at MarketVision. Tom

About the author:
Tom Bowley is the Chief Market Strategist of, a company providing a research and educational platform for both investment professionals and individual investors. Tom writes a comprehensive Daily Market Report (DMR), providing guidance to members every day that the stock market is open. Tom has contributed technical expertise here at since 2006 and has a fundamental background in public accounting as well, blending a unique skill set to approach the U.S. stock market.

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