The PowerShares QQQ Trust Series 1 ETF (Nasdaq:QQQQ) monthly chart is quite an amazing sight to behold.  I just did a post about how the current market structure could be similar to that of the mid 1970’s time frame and could potentially evolve bullishly instead of bearishly.

If you look at the long term monthly chart of the the PowerShares QQQ Trust Series 1 ETF (Nasdaq:QQQQ) the argument could be made that it is forming a very large head and shoulders bottom formation and is in the process of forming the right shoulder.  If true then it could evolve into a breakout scenario above the neckline and lead to an eventual price move towards the 65 range.

Similar to the sp500, the PowerShares QQQ Trust Series 1 ETF (NYSE:QQQQ) has so far only done a .382 fibonacci retracement of the entire rally that began from March 2009.  This could imply internal strength in the market ( so far at least).  A break below the 41 level would invalidate this pattern and destroy the symmetry of it and show that the bullish mid 1970’s scenario is not workable.  But for now the structures and setup seems to have good potential.

The neckline that is shown in the chart above was also a very logical point for the recent correction to start as it was right at previous resistance.  So for 2 to 3 months we have corrected off that level and now if we head back up to the neckline we could get an explosive topside breakout.  This is going to be a very important chart to keep an eye on in the days/ weeks ahead.

Written By Tom From Best Online Trades

BestOnlineTrades covers many different aspects of trading, from commodities to stocks, from indices to ETF’s.

Related posts:

1. S&P 500 Index At 1,300: Double Top or Inverse Head and Shoulders? (SPY, SDS, SSO, SH, SPXU)
2. Inverted Head and Shoulders: Bullish Opportunity In The Silver ETF (SLV, PSLV, AGQ, ZSL, SIL)

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