Can QQQ/Russell 2000 rally back above 50 day moving average? Can Dow Jones (DJIA) break to new highs?

QQQ rebounded after testing the key support level (83.68/83.37/83.28 area), near the 200 day moving average. Volume has been supportive as up volumes were higher than down volumes. MACD shows positive momentum below the zero line. However, the rebound seems to be corrective so far. A break above the 88.21 level and the 50 day MA at 88.40 is needed to defer and signal further strength towards 89.68 and higher.

A breakdown below the 4-month support line (yellow) would complete a head-and-shoulders top.

$RUT daily chart looks similar to QQQ.

DIA (DJIA ETF) looks the best out of the three. It should break above the 166.51/166.06 record high area quickly and decisively to negate a double top/triple top scenario.

If DJIA breaks out to new highs, then nasdaq and $RUT would follow, negating the bearish topping scenario. 

AUDUSD extends correction amid bearish momentum; .9200 area houses cluster of supports; near term sell

Monday’s bounce was capped at the falling 10 day ma at .9303. Bearish momentum remains strong but it is not oversold yet. The next support levels are .9205, .9190 and .9165/.9155 (50/200 day MAs).

.9315 should cap near term.

Trade idea:

Sell: around .9260/.9280

Stop above .9315

Target at .9200/.9140

S&P 500 index (SPX) could test the 200 day MA next

$SPX daily 

For S&P, since it broke the 50 day MA (yellow line on the daily chart), it has a good chance to test the 1738 area near the 50 week MA (i.e., 200 day MA currently at 1761, 3% down from last Friday’s 1816 close). We need to see how it reacts once it tests the 200 day MA area. Whether it is going to seriously break down there as it did in 2010 and 2011 remains to be seen.

$SPX weekly

As shown on the weekly chart, once the 200 day MA is broken, then the next support zone lies in the 1585/1485 range (i.e., 38.2% and 50% retracements of the Oct 2011/Apr 2014 rise).

Russell Index ($RUT) could test 1083 near the 200 day MA soon

 $RUT daily chart

For RUT, since it broke and closed below the rising trendline (linking 1010/1083 lows), the first target now is 1083 area near the 50-week MA (i.e. 200 day MA on the daily chart). It was back in the summer of 2011 when RUT seriously broke through the 200 day MA and tested and the bull channel support from 2009 low. The other times it broke the 200 day MA but quickly reversed above it. It could do that again here this time: it first consolidates between the 200 day and 50 day MAs before sliding through and go for the bull channel support as shown on the weekly chart. Or it could break through the 200 day MA quickly and go for the bull channel support. Let’s see how it reacts here this week.

$RUT weekly chart

As shown on the weekly chart, once the 200 day MA is broken, 943 near the bull channel support (right above the 200 week MA and also near 38.2% retracement of the 602/1213 rise @ 975) could be potentially tested. That could be a good buying area. That is about another 15% decline from last Friday’s close at 1111.0.

QQQ confirmed a lower top on Friday (4/4/14) on high volume sell-off since Oct 2011; Extending weakness towards the 200 day MA

Friday's price action is very negative for the market as whole. QQQ confirmed another lower high at 89.68. It has a good chance to extend the downtrend towards the 200 day MA. RUT was the next, closing in on March 27's 1147 low, which, if broken, would confirm a lower high too, extending the downtrend towards the 200 day MA next. SPY had a key reversal day Friday. The next key level is March 27's 183.90 low near the 50 day MA. If broken, That would confirm a double top and then the 200 day MA would be the next focus. 

EPI, EWZ and IF were among the best EM performers. FXI and RSX followed. They all have outperformed S&P. It would be interesting to see if their outperformance continues as the US equities continue to continue to correct. The current technical readings suggest that the EMs may see a pullback near term as they are overbought. As far as the pullback is shallow, then they should continue to outperform. They need to be monitored closely.