After the close last Wednesday, our mid-term system triggered a sell signal. We would encourage you to make the necessary changes if you have not done so already.

It is quite possible that this sell signal will only last a handful of days, as the current uptrend is very strong. As the market is extremely overbought, we can expect a pullback here. Most likely this mid-term top has already been put in and we have started the decline.

QQQQ is likely headed to its breakout area of 45.50. You can notice how the blue uptrend line is still intact. A break of this line, will confirm that the mid-term top is in and that the downtrend has begun. We believe that a buy signal will possibly be triggered in the 45.50 support area, but if this 45.50 area is also broken, we could expect a move down to the next two support lines annotated on the chart.

SMH has likely already started its pullback and its first downside hurdle is marked on the chart with two blue horizontal lines. A break of these lines should push the ETF to our target zone and SMH's recent breakout area of 35.60-35.70.

IWM has broken our steeper uptrend line, but is still above the lower uptrend line. IWM will likely come into contact with this line around the 81 support area. A break of 81 will push the ETF to its 50 day moving average and possibly the two lower support lines in the 79.20-79.60 area.

Most likely the downtrend has already started. A few more down days should relieve the overbought condition of the market and lead our system to trigger a buy signal.