long and strong? Not really.

Well i started taking some light long positions in the qqqq's today. I am doing this because we are in the process of testing the January lows in this ETF and i believe it is likely we will see a bounce here. I am not very confident as this market is brutal, but I'm stuck dipping my feat in somewhere.

I think the biggest concern I have is that the nasdaq 100 (qqqq etf) is the only major average that is at the January low. The S&P 500 and dow jones industrials still have some ways to go before hitting the lows in January. So we have a divergence here. The fact is the tech stocks as represented by the qqqq's have been beat up a little bit more than the rest of the market. That is why they are already back to test the January low. So will the tech stocks lead a bounce here or will they mark time while the other averages decline further to catch up? This is impossible to say, but i do know we are at some significant support on the qqqq's.

If you look at the January low it was a little below 42, but this is also the low put in on March of last year. In March a strong double bottom formed and the ensuring rally raged all the way to 55. Given the level of support going all the way back to March of last year and the action today which saw a significant rally before the bears took some shots, I think that this level is not going to just be sliced through without a fight.

I'm not calling for any long term rise in stocks from here, even though you can see if this level holds you could form a double bottom, I'm just looking for a rapid short cover rally which should last no longer than the last one. If we break 42 we have to bail.

The other concern is the bond insurance companies. If more finally get downgraded or someother really bad news comes out this could trip things up pretty good. But i have to think that some of this is starting to get priced in.

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