All three of the ETFs we follow invalidated their head and shoulder patterns last week. This suggests that the pullback has been completed and the new leg higher is emerging.

QQQQ has barely broken above 2007 resistance. The break above recent highs has been so small that it is best to look at the ETF at 2007 resistance right now, not in new territory. A break into new territory should bring a stronger move. Since the move has been small so far, we would not be surprised to see a fall to the 47.00 or 47.50 area before a continued move higher. On the other hand, a stronger push above 2007 highs could be seen in this spot as well. What we know for sure is that since the head and shoulder formation has been invalidated, we are currently in the middle of an uptrend.

SMH is also barely above 2007 highs. This ETF also invalidated its head and shoulder formation last week. If a pullback occurs, it is likely that it will stop in the 37.50 area. The next support level would be 37, followed by the 50 day moving average. A break above recent highs should launch SMH much higher.

IWM has broken above the left shoulder of its head and shoulder formation and has since found support on that area, 84. A pullback would bring IWM to the support lines below and/or the 50 day moving average. If there is a pullback, we do not believe the ETF will break below this moving average.

Our mid-term system is beginning to become more overbought. A few more days higher could trigger a sell signal.