The Nasdaq-100 PowerShares QQQ (NasdaqGM: QQQ) is the first major stock exchange traded fund to test its 200-day simple moving average in the bounce since the summer sell-off.

The Nasdaq ETF rose 0.5% on Thursday but was off its session high.

In early August, the widely followed U.S. stock indexes fell below their 200-day averages and have been stuck below ever since, said J.C. Parets at All Star Charts.

“For a stock or index to be in a well-defined uptrend, I want to see it trading above an upward sloping 200-day moving average,” he wrote.

While the S&P 500, Dow Jones Industrial Average, Russell 2000, NYSE Composite and Dow Transportation Average are still well below this key indicator, the Nasdaq-100 is the first to attempt to recover it, Parets said.

“It’s almost like the rest of the market indexes are now watching how successful this attempt becomes as the others are likely to follow the leader,” he noted. “We also want to keep an eye on what the semiconductors are doing” as sector ETFs such as Semiconductor HOLDRS (NYSEArca: SMH) typically lead the Nasdaq higher, or warn of weakness to come. [Semiconductor ETFs Lead Market on Deal Hopes]

PowerShares QQQ


Full disclosure: Tom Lydon’s clients own QQQ.

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