We believe that the stock market will soon begin a pullback. The market continues to be overbought and rarely can the market continue higher when it is in this state. The pullback should be rather shallow and will allow for more strength in the months ahead.

The NASDAQ Composite has broken below our blue uptrend line again. It is likely that the index will fall further before moving back above the line. A sustained break of yesterday's low will suggest that the correction has begun. The support level is indicated on the chart with a small red horizontal line.

The S&P 500 has also broken below our blue uptrend line. Support is at yesterday's low, the 1500 area. If the index has a sustained break of this area we can assume that the pullback has started.

The Russell 2000 has still not been able to break above 835 resistance. A break of yesterday's low should push the index to its 50 day moving average.

Little has changed since last week. The market has made little progress to the upside and a correction is likely to be in our near future.