Fibonacci, McClellan data and technicals show that another rally leg's possible if the QQQQ can stay over $39 - but the big-picture risks are high

When the trend is bullish then traders normally buy pullbacks; then when the trend is down, we sell rallies. There are various ways to measure trend - and while this is a mixed picture, one point using the QQQQ's as an example, is that the QQQQ's are just testing support including the 50-day moving average. And this ETF remains above its early September low, as you can see in the chart below. Its indicators look similar to the way they looked at the August lows. In a minute we'll look at big-picture weekly and monthly charts of the QQQQ, $SPX, Russell 2000 and the transports ($TRAN). Also, at my UBTNB3 blog I've posted some technical charts like the bullish percent and the percent of index stocks above their 50-day moving average. Those plus the raw volumes on the down days this past week are a warning that losing the September lows ($39 in the QQQQ) would call out "trend reversal" and start selling rallies! The $39 area for the QQQQ is also important because it represent the test of the QQQQ's 50% retrace to its 2007 high. But aren't there reasons to think equities can get support here and bounce from short-term oversold? Since the QQQQ got just pennies away from the Fibonacci .618 retracement to its 2007 highs, it's dropped back to its 50-day moving average. Seems to me with this setup, it's worth a try playing for a bounce at least - looking for a retrace up and perhaps a slight new high at or just above $43.30. Below is the daily chart of QQQQ, then we'll look at the bigger picture charts.

My big-picture SPX chart is below - drawn up almost a year ago with thoughts about where this bear-market drop may land, with numbers that are still potentially pertinent once we know the next wave down is confirmed underway. I still think it's reasonable to look for the next low to focus on 600 SPX, then a really great, bigger-level B wave up.

And my closer look at the SPX monthly chart. This fork is bearish and yes, "Trader Joe" shared a more bullish fork idea that I put up at UBTNB3. I'm not persuaded to the bullish fork, but ultimately we will know whether or not its lower channel line gives support. Meantime, the SPX hit up against a fork trendline on both forks! including one on my bearish fork, below; as well as the Bollinger Band midline. Remember when I said this was a HUGE test? Doesn't look like that was wrong! It's a major reason why I think any bounce that produces a new high won't give more than a slightly higher level.

Here's my QQQQ weekly chart with Fibonacci retrace levels. Unless that .618 retrace level at $43.30 was already enough to turn it back, it can be a magnet. So far, its intraday high was at $43.17. Falling under $39 would likely say, it already did all it could.

And my monthly chart of the Transports - definitely concerning because it's possible it's already met its Fibonacci match! To me this index really does look like it's finishing the B-wave midpoint of a zigzag, starting to roll over for another leg to target 2055 (or if super bearish, to 700 - but that looks too extreme to me).

And here are McClellan data charts for the NYSE ($NYA) and Nasdaq. The McClellan Oscillator's plunge under zero did make a new low - bearish! But a trandline could be drawn under the lows for the Oscillator on the NYSE one - possibility for a bounce or rally. Longer term, the Summation Index dropped under its own 50-day moving average - bearish! All in all - don't overlook that this remains a bear market. Whether or not equities poke a new high before falling under the September lows, the March lows are set to be tested on the next wave down afterward.