The stock market continues to rise and IWM is outperforming both QQQQ and SMH combined this buy signal. Our mid-term system is currently in neutral territory, but if the market continues to march forward without pullback we will have a sell signal by the end of this week or early next week.

QQQQ has been rising on decreasing volume, but considering the holiday it is not at all surprising that volume would be this light. Resistance lies in the 53, 54, and 55 areas. It is possible that we will be at or near 2007 highs before a sell signal kicks in.

SMH is currently at resistance as it closed right below its falling 50 day moving average. Subsequent resistance is at 34, 34.50, and 35. The 200 day moving average also resides around the 35 area.

IWM has had an extremely powerful move off of its recent bottom. The resistance areas of 80 and 82 remain the same.

We only have a few more trading days in 2007 and our mid-term system currently has a gain of about 55% for the year. Even though there had only been pockets of high volatility during this year, the market conditions worked well with our system. In more volatile markets (which we will inevitably have) our performance should be even stronger.

Happy Holidays to All!