The NASDAQ 100 is extremely overbought and we believe that the pullback will begin very soon, possibly tomorrow. SMH is in the middle of a range and IWM is right below all-time highs. If the pullback does not begin tomorrow, we would expect it to begin by the end of the week.

The first shows the NASDAQ 100 with blue uptrend lines and the Ultimate Oscillator and RSI indicator below the chart. You can see how the the index ran into our higher blue uptrend line today. Also, the two indicators below the chart are extremely overbought. You can see the fall that resulted from this condition in July. We do not believe the index will fall this far this time, but it is possible for the NASDAQ 100 to fall about 5% to the 2050 support area. The lower uptrend line may serve as temporary support, before a larger fall. The volume today was very light and it was also a Monday. It is common for the stock market to have slight upward movement on Monday followed by a strong decline on Tuesday when a downtrend is about to begin.

SMH is still in between the 37 and 39 rectangle. A break of last Wednesday and Thursday's low should push the ETF to the 37 area. This is a possible stopping point for this sell signal.

IWM has yet to hit its 2007 and all-time highs. If the ETF has any more strength before the pullback, it should stop at the 85 resistance. A fall to the 80 level is expected during this move down.

It is likely that today was the top of the recent powerful uptrend. If the stock market does not reverse powerfully tomorrow, we expect to see a reversal by the end of the week.