The stock market is close to a mid-term top and a medium to strong close today would likely trigger a sell signal in our system. More likely, we will not have a very strong close today and with QQQQ not giving us strong enough follow through the last few days to trigger a sell signal, we believe it is likely that we will have a significant breakout before the market pulls back.

There is a blue uptrend line annotated on the first chart of QQQQ. We believe that any short-term weakness should stay above this line as we are likely approaching the final push higher before a pullback. If this uptrend line is broken, we expect the 44.75 support to hold. Breaking this line would suggest that there will be more sideways action and consolidation before the breakout occurs. In the end, this will allow for a more powerful breakout before the mid-term pullback begins. If QQQQ does have a medium to strong close today, it is possible that our system will trigger a sell signal, but recently the market has been pulling back right before it gets overbought enough to trigger a change in signal in our system and it is likely that that trend will continue for now.

SMH has broken above six month resistance finally. We would expect a pullback to the 35.50 area at some point. It is possible that the ETF will continue its breakout a little longer before it pulls back to the original breakout area.

We have added another uptrend line to our chart of IWM. We expect IWM to stay above this line during the current buy signal. A break of this line will push the ETF to 81. If IWM breaks above recent resistance this buy signal we expect the push higher to be strong.

The stock market is overbought, but not enough for us to trigger a sell signal. Any sideways action in the coming days will allow the indices to move even higher before a sell signal is reached.