At this point it is a near certainty that the recent pullback is over. Last Wednesday's powerful move confirmed that the double bottom pattern formed in QQQQ and IWM was indeed valid and would be the base to propel the indices higher in the days ahead.

Support is in the 43.50 for QQQQ. Not only is this strong horizontal support from months before, but it is the top of the double bottom formation. What once served as resistance (the top of the double bottom pattern) should now serve as very strong support. We have also broken the 50 day moving average again to the downside. This will be a likely catalyst to push the ETF into higher territory. During an uptrend, indices and ETFs do not stay below significant moving averages for long.

Nothing has changed in SMH. We are still in the same rectangle pattern from months ago. Support is around 33 and resistance is around 36. With QQQQ and IWM nearing their important support levels, we do not foresee SMH falling to the lower end of this formation (33 area) during this buy signal.

Like QQQQ, the chart of IWM looks extremely healthy. This ETF also broke out of its double bottom formation nicely and is currently retracing before another strong push forward. The upper two horizontal support lines, along with the 50 day moving average, should be the only support needed to push this ETF to 2007 highs at a minimum. If IWM does break these support levels, any weakness should end in the 78.50 area.

After the strong move higher last Wednesday, a few days of weakness were expected. This is exactly what has happened. We believe that the bottom from the recent drop has definitely already occurred and in the days ahead the ETFs we follow will be pushing to 2007 highs at a minimum.