The above chart is a 2 day chart of the QQQQ with the 20 day 1.5 SD Bollinger bands in black and the 20 day Keltner channels in magenta. The first indicator panel is the 10 period rate of change and the second indicator shows if the market is above or below the midpoint of its 14 period range (14 period maximum - 14 period minimum).
This squeeze has been setting up for the last 4 weeks. We can expect that at some point in the very near future we will see an explosive move in one direction or the other. The 10 period rate of change is suggesting that the breakout will be to the downside. The range indicator is suggesting the opposite. The Dow and the Transports have already signaled a short breakout, but there is nothing that says those signals can't be false.
We are approaching the choke point. Either markets will continue to trade in a narrow range invalidating the bearish wave counts, or we will see a breakout within the next week. Today the Qs and other markets appeared to complete a 3 wave rise from yesterday's low. If so, markets should move down from the start in the morning. The Qs could move above the 1/28/09 high and not invalidate the bearish case, but anything beyond that will put the bulls in complete control.
The seasonal pattern indicates that the current rise is just part of a small countertrend and the larger trend should be down. However, the markets need not follow the seasonal pattern. Price is the final arbiter of the trend and price still says the trend is down. If this changes, we must change with it.