It’s been a long time coming and this may be one more in a long string of false alarms (sell signals) but it would appear to me that the QQQ/$NDX (Nasdaq 100) may be in the early stages of the next significant correction. This first chart below is the same $NDX daily chart found under the Live Chart Links sidebar on the right side of the home page of the site (click here to view the live chart). Note how prices seem to be finally rolling over after the recent extreme overbought reading on the RSI 14. In fact, if we look at the only other such extreme overbought readings on this nearly 4 1/2 year daily chart, we can see that although the initial extreme readings were immediately followed by a correction, it was the second, lower 70+ reading on the RSI that preceded the most powerful corrections. As of now the RSI 14 has just clearly rolled off the second, lower overbought reading following the late June/early July extreme (black arrows on RSI). The blue primary uptrend line remains my next major downside target in the $NDX/QQQ.

$NDX daily Spet 15th

Zooming down to this 120 minute chart of the QQQ, the Q’s look to have broken down from this rounding top pattern on the break below this horizontal support line around the 99.00 level (now resistance). Unless the Q’s manage to regain that level soon, my expectation is for a move down to at least the 94 area, a drop of about 4.4% from current levels.

QQQ 120 minute Sept 15th