Today most likely ended the recent short-term fall. SMH is currently sitting at support, while QQQQ is just above its next support area, and IWM is right below the 76 support level. With 2008 trading beginning on Wednesday, we expect the stock market to charge higher in the next couple weeks.

QQQQ is in a bullish formation and is currently above strong support in the 51 area. The pattern looks like an inverted head and shoulder pattern with the neckline sitting around 52.80. A break of this area should push QQQQ to 54, followed by 55, and finally a break above 2007 highs. If QQQQ breaks below 51, additional support lines are shown on the chart.

SMH is sitting at 32.50 support. It is possible that the ETF will fall to 32 before a resumption of the mid-term uptrend. A break of last Monday's high should push SMH to 34, followed by the 35 area.

IWM is most likely in a complex inverted head and shoulder pattern. Both shoulders and both heads are indicated on the chart. As long as the ETF stays above 75 we can assume that we are in a head and shoulder pattern. IWM is headed to 80, followed by 82, and finally a move to 2007 highs.

We believe that 2008 is going to start off strong in the stock market. If the ETFs we follow did not hit their short-term bottoms today, they should on Wednesday morning.

Happy Holidays to All!