Purely from a pattern perspective, my work argues that there should be little doubt that the Q's (Nasdaq: QQQQ) are in the midst of a meaningful correction of the upmove from the 12/29 low at 28.47 to the 1/06 high at 31.63. Today's downside breach of yest.'s intraday low at 30.08 coupled with the form of the decline from this AM's pre-market rally high at 30.90 indicates strongly that the Q's have ended a... secondary downleg off of the 1/06 high (31.63), which should press prices towards a test of key support along the Nov.-Jan. trendline, now at 29.65.

If the trendline is broken and sustained, then additional weakness should be forthcoming that projects into the 28.00 target zone. Only a rally that hurdles and sustains above 30.80/90 will neutralize my currently negative near term outlook.

By Mike Paulenoff

Mike Paulenoff is author of the MPTrader.com (www.mptrader.com) , a real-time diary of Mike Paulenoff's trading ideas and technical chart analysis of Exchange Traded Funds (ETFs) that track equity indices, metals, energy commodities, currencies, Treasuries, and other markets. It is for traders with a 3-30 day time horizon, who use the service for guidance on both specific trades as well as general market direction

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