DIA Double Top Formation

The DIAMONDS Trust (AMEX:DIA) looks as though its putting in a double top after yesterday's action. If this slide continues, it looks like the first support would be in the 132 range. If this base line is breached, the diamonds could go as low as 127 before finding any strong support.

Helping fuel this recent selloff is the increase in the 10 year rate, profit taking for the 2nd Quarter, and worries about the CDO market and possible impact of large scale repricing.

QQQQ’s Distribution Days and Blow off Top

As the PowerShares QQQ (NasdaqGM:QQQQ) moves higher, there are some warning signs that the recent bull market in the ETF could be losing steam. Since May, there have been 9 “distribution days”, where the fund sold off on increasing volume. Subsequent positive moves to the upside have been lacking any exciting volume, showing a lack of conviction in the market that the current uptrend will continue.

Especially worrisome are the past three days of trading, where volume in the fund has been significantly lower than usual, while hitting new higher ranges. Adding to this the enormous gap that needs to be filled from a few days back, we could see a mini blow off top in the short term.