One of the best barometer’s of market sentiment is the NQ (e-mini future for the NASDAQ), and whilst many analysts were forecasting market meltdown the NQ was quietly reversing and clearly signalling a short term reversal.  The bears, once again, have been sent smartly back to their caves!

The daily chart of the NQ (NASDAQ) is one I’ve used several times in the past with the clearly defined levels of resistance and support denoted by the respective green and yellow lines. Whilst the lower level of this price zone was breached, it was clear from the associated volume and price action that appeared in early February, the index would not be falling far.

Indeed the index not only promptly recovered, but also has moved firmly through the upper level resistance, supported by strong and rising volumes, suggesting further bullish momentum to come.

As always, the NQ (NASDAQ) is a leading indicator, and one that is even more important in the current economic climate, as we move from deep recession into an early expansion phase where we can expect to see the tech sector, in particular, leading the way.

Those reader wishing to gain access to the NASDAQ index through the ETF world can use the PowerShares QQQ Trust (QQQ, quote)