On Thursday night our mid-term system triggered a sell signal. If you have not already done so, we would encourage you to close out your long positions and initiate short positions in the three ETFs we follow (QQQQ, SMH, and IWM).

As we feel that QQQQ will find support at or near its 50 day moving average, there is little time for our system to trigger a buy signal. The moving average is quickly approaching the current price of the ETF. If we are correct about QQQQ finding support here and our sell signal was triggered at the correct point, we can assume that within the next few days our system will trigger a buy signal. If the ETF falls to this area and we do not trigger a buy signal, it is likely that our sell signal was premature and that QQQQ will break a few percent above its recent highs before a mid-term top is in. We believe that the first scenario is most likely and that we will have a buy signal by the end of the week.

As can be seen from the first chart, support is in the 44.50 area, the 50 day moving average, and the 44 area. We do not foresee QQQQ breaking below 44 this sell signal.

SMH is still extremely close to the 35.70 resistance area. We believe that the ETF will at least fill the gap from last Thursday's higher opening this sell signal. This would bring SMH to the 34.50 area. If this is broken, we believe SMH will find support at its 50 day moving average and 34 horizontal support area.

We believe that IWM is headed back to its recent breakout in the 79 area. 50 day moving average support is just below the breakout area. The support lines that we feel IWM will fall to this sell signal are indicated on the chart.

We believe that the gain this sell signal will be rather small and quick. We feel there is a strong possibility of our system triggering a buy signal by the end of this week.