I sent an e-mail out on Friday telling you how great of a buying opportunity this morning would be and today's action has started to confirm my forecast. I believe we have a powerful move ahead of us and today's open began the new climb higher.

Most often dominant trends have a very quick and dramatic quality to them, while counter-trends (corrections against the dominant trend) or more choppy and take longer to form. You can see these qualities in the first chart of QQQQ.

The first red line shows the strong downtrend that began two weeks. You can notice how quick and deep this downtrend was. The next several days acted as a corrective move that ended at the close last Thursday. The second red line shows the final and second leg down of the move. This morning the dominant trend shifted and I have used a blue line to show this. Soon after, a corrective move lower happened, and finally the uptrend resumed at the close. I have added a second blue line to show how quick and fast the second leg up should be. My price target for this leg higher is the 54 area. Often the second leg of a strong move has a gap higher or lower (if the dominant trend is down) early on and QQQQ is likely to open much higher tomorrow. This leads me to believe that the new leg higher has definitely begun. The 54 area is only a short-term target for this move. We will likely see a significant break above 2007 highs before another pullback begins.

The low for SMH today was right above one of our support lines. If today's bottom was the end of the recent downtrend, I see SMH headed to the 36.80 area next, followed by 37.60, and finally 39.

IWM broke both its 50 day and 200 day moving averages to the downside on Friday and closed above both of them today. The ETF's strong move today was extremely bullish. The next resistance areas can be seen on the chart and are near 82,83,84, and 85.

I believe that a powerful move is beginning and will add to our near 50% gain for 2007. Sentiment was dark enough on Friday to allow for a huge uptrend to emerge out of one down day.