It is unbelievable how negative the current sentiment is on wall street.

It is unbelievable how negative the current sentiment is on wall street. Traders, investors, and the public alike are all bearish on the stock market. The Investor's Intelligence survey reported an equal number of bears and bulls last week! This is very rare and most often a powerful rally emerges with such pessimism. We also mentioned the bearish percent in the AAII survey last week. With the current sentiment being so dark, we believe that a powerful rally will soon occur, most likely starting this week. The first chart is of the NASDAQ Composite. You can notice how the index has recently run against its downtrend line from the beginning of May. We have also noted the horizontal resistance at the 2150 level. A sustained break of both of these resistance areas will suggest that the powerful rally has started. The second chart is of the NASDAQ 100. You can see how this index has already broken above its downtrend line, possibly foreshadowing the NASDAQ's coming move. We have also noted the horizontal resistance that when broken will confirm that the rally is underway. The third chart is of SMH. The Semiconductor ETF has already broken above its downtrend line as well. It is currently in a consolidation pattern which we believe will conclude with a move to the upside. The rectangular consolidation is shown with a support and resistance line. The next chart is of the Russell 2000. You can see how this index has strong resistance at the 700-702 level. The Russell 2000 will have to break the horizontal resistance at the downtrend line before we know for sure that a rally is about to emerge. The last three charts show how extremely bearish the market has become. The first chart shows the public short sales. Another all time high last week! The second chart is the Investor's Intelligence Survey and the last chart is the AAII survey. We have had to wait patiently for the coming move, but we believe that a powerful rally is just about to start.