Excess in one direction has given way to excess in the opposite direction as the down draft from 2 weeks ago has been completely wiped out like it never happened. With that being said, prices on the QQQ are testing resistance levels (that were old support levels when prices broke down completely). Although Friday is a long ways away, this week's closing prices will be important.

Figure 1 is a weekly chart of the S&P Depository Receipts (symbol: SPY). The red and black dots are key pivot points, which represent the best areas of buying (support) and selling (resistance). The SPY is coming into the resistance zone at 120.79. This was the breakout point for prices last November. A weekly close above this level would carry prices to 127.18, and by my definition, a close above 127.18 would end the bear market that started only a few short weeks ago.

Figure 1. SPY/ weekly

Figure 2 is a weekly chart of the PowerShares QQQ Trust Series (symbol: QQQ). A weekly close over 53.95 would be significant, and prices are likely to revisit the 40 week moving average and possibly the old cyclical highs. A weekly close over 53.95 would also lend credence to the notion that a bear market (of consequence) in QQQ has been averted.

Figure 2. QQQ/ weekly