Figure 1 is a weekly chart of the PowerShares QQQ Trust Series (symbol: QQQ). The black and red dots are key pivot points which are the best areas of buying (support) and selling (resistance). With this week's price action the QQQ is breaking to new rally highs. This would be the 4th time over the past 10 months that QQQ has attempted to breakout above the key pivot at 58.46. The 3 prior failures are noted on the chart.
Figure 1. QQQ/ weekly
The big question is: will this stick? Will breakout #4 be the charm? Difficult question to answer. Why? Any metric used to measure the health of market action has been rendered useless. Volume? Pull up a chart and add some volume bars and you will note that this past week's volume has been the lowest volume week in over a year with the exception of the recent Thanksgiving and Christmas weeks.
So what should you do? Pay very close attention to the technical signposts. 58.46 was resistance and it is now support. A weekly close below this level means that the breakout was a fake out. It really is that simple especially in a world where the only thing you can trust is the price on your computer screen.