Shares of the ETF Powershares QQQ Trust (NASDAQ: QQQQ) declined 8.2% in the selloff that started January 20 and reached a closing low of $42.79 on January 29. Is the selling over?
After two days of higher prices, Powershares QQQ has regained 2.0%.
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Most corrections, assuming this is only a correction, play out in three waves. So far, there has been only one wave down—wave A—and the rally on Monday and Tuesday of this week has not yet reached levels that we would define as a rising wave B.
The Powershares QQQ may have more upside ahead, but we would then be looking for another wave down, wave C, probably to at least the $40.45 level. This is 7.3% below Tuesday’s close at $43.65.
By Frank Kollar, editor and chief analyst, FibTimer.com
