According to our mid-term system, the stock market is extremely close to being overbought. If the market continues to rise tomorrow we believe it is nearly inevitable that our system will trigger a sell signal. A small pullback here would allow for continued strength in the days ahead and the gain on the current buy signal would likely end up being much larger.

QQQQ broke above the 44.75 resistance level today and is likely headed to resistance in the 45.50 area. A small pullback here would likely find support at 44.50. If that level is broken to the downside, we would expect support to hold in the 44 area. If QQQQ does move to the 45.50 area tomorrow, we expect a sell signal to be triggered.

SMH is still in the same rectangle pattern and has underperformed both QQQQ and IWM this buy signal. If tomorrow's close does put an end to the current buy signal, the gain on SMH will likely be small. Resistance is in the 35 and 35.60 areas.

IWM hit a new all-time high today. A pullback would likely find support in the 81 area. If 81 is broken, the blue uptrend line on the chart should be able to stop the decline.

A move higher tomorrow will likely end the current mid-term uptrend. A pullback will relax the overbought condition in the market and allow for higher gains in the days ahead.