We believe that the bottom of the recent correction has already happened and within the next day or two the stock market will start another leg higher. The large move that happened last week has not had a follow through day yet and we believe it is coming within the next few days. The follow through day will likely be a large percentage gain on high volume for all of the major market indices.

QQQQ had its momentum stopped at its rising 50 day moving average last Friday. We placed blue Fibonacci retracement lines on the chart to show how the recent short-term pullback has been just under 50% of the incline that started last Tuesday. With the beginning of a new trend it is common to have a pullback of this size before the resumption of the trend.
A pullback of 61.8% would be less likely. Therefore, we believe that the recent two day pullback is over. Our next target for QQQQ is 54, followed by 54.80. A few days of strong upside action could trigger a sell signal in our mid-term system.

SMH has retraced 50% of its recent move. This ETF has a long way to go if it is to end in positive territory this buy signal. Likely it will not. Our target for the next push higher is the 34, followed by the 34.50 resistance area.

IWM ran into our 78 resistance area on Friday before retreating. IWM is right above its 50% retracement level. Our short-term target for the ETF is 80, followed by 82, then 83.

The recent two day pullback has allowed our system to become less overbought and should therefore allow for higher gains this buy signal. We believe that the short-term pullback is over and we will see a resumption of the mid-term uptrend in the next day or two.