QQQQ and IWM continue to break into new highs, as SMH continues to lag behind. The current bullish look of both QQQQ and IWM suggests that in a short period of time SMH will likely break above recent resistance and end the fear of a continued downside break below the neckline of the head and shoulder formation.

QQQQ completely ended any possibility of a head and shoulder formation when the ETF broke above the May 23 high last week. Currently, QQQQ is sitting right above that breakout and although it is possible that the ETF could fall to the 46.70-47.00 area before a further move higher, this should only be a short-term pullback within the mid-term uptrend. Our mid-term system is becoming more overbought and a couple of more days higher could trigger a sell signal.

SMH has not been able to break above the shoulders formed in the 37.50 area. A sustained break to the upside of this area would suggest that the downside move from the head and shoulder formation is already finished. The 50 day moving average is rising and will likely offer support to any pullback in the coming days.

IWM continues to look very healthy. Last week we broke above the 84 resistance area and the ETF is sitting right above that breakout point now. Any fall should find support in the 83 area.

The mid-term uptrend is likely in the middle of its course right now. SMH continues to trail behind, but a break of the 37.50 area should begin a strong push forward.