After the close on Friday our mid-term system triggered a buy signal. We encourage all of our subscribers to make the necessary changes if you have not done so already. The default allocation is an even buy of QQQQ, SMH, and IWM.

The stock market continued to fall today. QQQQ is possibly headed to the 49 area. A break below 49 would push the ETF to the 200 day moving average, but we do not foresee a break below that level. There is also support at 49.50, which is indicated on the chart. Once QQQQ does climb higher we see resistance at the 51.50 area, followed by the falling 50 day moving average.

SMH is currently at a field of support. Even if SMH does break the 32 area, it should not fall below the lowest support level shown (31.30).

IWM is very close to its recent lows. A move of 1% lower will push the ETF to the lows from November. We believe that a double bottom formation is being carved here. The next resistance area is 76, followed by 77.

Even though I have commented that the stock market may have a little further to fall before the new uptrend starts, I strongly discourage subscribers from following our subjective ideas over our concrete mechanical system. We will rarely hit a top or bottom perfectly, but in the long run the most money will be made by following the system and signals immediately when they triggered, not by second guessing the system or following our subjective ideas that are presented in commentaries.

Over the next few days the stock market should bottom, if it has not already.