Last Thursday the stock market was extremely close to triggering a buy signal in our mid-term system. The market became oversold very quickly, but not enough for us to cover our short positions. Today, we are having another down day. It is doubtful that a change in signal would happen after today's close, but it is possible that we would trigger a buy signal if the market pushed lower tomorrow as well.

QQQQ is currently in a small rectangle formation. A sustained break of either of the two purple lines should lead to a quick push higher or lower (depending on the direction the ETF breaks out of the formation). A break lower should push QQQQ to the 45.50 area and will likely trigger a buy signal.

SMH broke above the 37.50 resistance. If the ETF falls back below, the next stop will likely be in the 36.50 area. A downside break of 36.50 would push SMH to the 35.50-35.70 area.

IWM is currently headed toward 81, before a likely push below the 50 day moving average and into the 79.30-79.60 support area. A break above 83 will suggest further strength above the 83 level before a pullback occurs.

We believed that this sell signal would be short and that the gain would be rather small. It looks as if this will end up being the case. Another push lower tomorrow should trigger a buy signal in our mid-term system.