The qqqq's help represent where risk is headed. The qqqq's are also a public favorite. When Joe Q. Public is enticed back into the stock market and is convinced by the likes of Cramer, he often sticks with familiar popular stocks such as Apple, Google and Rim (or gets sucked into highly speculative stocks like First Solar). He uses their devices everyday and if "he" uses them and thinks they are wonderful than the logic is everyone else must be. And that is true to an extent. These companies have piles of cash and are successful and in no danger of going bankrupt.
But P/E's are a finicky thing. Apple is a great company at 20 P/E as much as at 30 P/E yes?
Anyways, looking at the qqqq's daily chart, it shows great signs of weakness in my opinion. Negative divergences everywhere particularly the Money Flow. The daily shows that the qqqq's broke under the great rising bear wedgeline and recovered for now. Also of great note are the volume candles both up and down. Volume never lies.
The qqqq's weekly also shows that they managed to close their big gap down from 2008. They may keep chugging for a bit, but they aren't likely to make great advances from here on out til the end of P2 (if it has further to run). Also notice how last June 2008 they had an intraday "recovery" high a few weeks after the SPX and DOW had topped. This pattern also occurred in November 2007 after the DOW and SPX topped in October.
But this pattern of topping after the DOW and SPX is not always assured. Notice in August 2008 that qqqq's topped out early in August and when the September early surge of the indexes attempted to make a new recovery high the first trading day after Labor day, the qqqq's were already well off their August high.
The bottom line is risk vs reward. The charts seem to indicate that there is a great deal more risk on starting a long side swing trade of the qqqq's trade than the short. There is a lot of money being taken off the table. The qqqq's are being transferred from strong hands to weak. Distribution.
As far as Primary wave 2's topping process - it is likely to get more muddied. Some indexes may make new recovery highs, others may not.