And the grind continues - levitation at its finest.

Who needs gravity when we have the stock market? On the surface, it seems to defy the fundamental law of nature that restrains the rest of us to this earthly realm.

The bald eagle can fly, but US markets seem to put it to shame, flying even higher, with QQQ taking the lead. A National Symbol change may be in order here, but I digress.

This is where it gets interesting. When you find yourself scratching your head at the price action of a particular market or stock that you are actively following, that's usually the signal for you to really start paying attention to what's happening and have your trading plan ready.

As noted by Dr. Colin Camerer, a behavioral economist and one of several researchers in a recently published study on irrational exuberance in the markets from the journal Proceedings of the National Academy of Sciences of the United States of America:

So lets take a look at whats been going on in our brains as we watch QQQ defy gravity.

The Tug of War Continues

QQQ is leading the US stock indexes this week, thanks in particular to strong earnings reported from Apple and Facebook.

Whereas the SPY (S&P 500 Index) only gained 0.22% on the day and the DIA (Dow Jones Industrial Average) actually closed down 0.11%, the QQQ was the shining star, closing up 0.64%.

Since the mid-April lows just below $84, QQQ is now up nearly $14. Quite a run, no doubt.

Notably, the 50 Day MA is approaching the late June $93 congestion zone on the chart.

Despite the continued rise in QQQ, the ADX is pointing down, so what we're really seeing here is a market trapped in a range trade on the daily time frame, with the bulk of the recent trending move higher behind us for now.

The red arrow on the chart points out that -DMI and +DMI are at each other's necks, as the tug of war between the bears and the bulls heats up.

The strength in QQQ compared to SPY and DIA is notable to point out. Once earnings season ends, it will be interesting to see if traders start paying more attention to geopolitical tensions, with a risk off approach, versus the continued risk on preference.

In July alone, the 20 Day MA has served as support for QQQ during two pullbacks in price. Should the bears reassert themselves and get the QQQ to close convincingly below the 20 Day MA on any subsequent pullback, the 50 Day MA would be on watch as the next support level.

Let's see what happens, and feel free to post your thoughts in the comments section below!