Looking at the hourly chart on the Q's (NASDAQ: QQQQ), my near term pattern work argues strongly that the decline from Wednesday's rally high at 30.65 ended this morning at 29.19, and that in the upcoming hours the Q's will carve out a minor base area ahead of another upmove that should revisit 30.00/20, and then possibly 31.25/50 prior to completion.

Despite what appears to be very ugly action since Wednesday's rally peaks in the major equity market ETFs, my work continues to "warn" me NOT to get short yet, and instead to expect another run to the upside that is as potent as was the two-day press to the downside. It is for that reason that I am taking a shot on the upside here, looking for a stair-step rally that finds a way to revisit this week's high, if not considerably higher, prior to a very significant downside reversal.

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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