As we have stated in previous commentaries, we strongly believe that the correction is over. We also believe that the recent pullback ended yesterday. The indices had a great setup at yesterday's close for a strong move higher today and that is indeed what has happened. In the next 4-6 weeks we believe we will be back to 2007 highs.

The NASDAQ Composite found support at the 2500 area. You can see from our annotated chart that an inverted head and shoulder pattern has been formed. Yesterday concluded the second shoulder. 2575 is the next strong level of resistance, followed by 2625, 2675, and 2007 highs at 2725. We will not go straight up, but we believe we are on target for 2007 highs within the next 4-6 weeks.

The S&P 500 has also carved out an inverted head and shoulder pattern. The two shoulders and the head are marked on the annotated chart. The next resistance levels are 1480, 1506, and 1515. The final level is 1540, before a push to and above 2007 highs.

The Russell 2000 has formed a complex inverted head and shoulder pattern. You can see from the chart that there are two heads in the Russell 2000's formation. The 800 level is where the index is headed to next and will serve as resistance once hit. The subsequent resistance levels are marked on the chart. The Russell 2000 has a long way to go and to catch up to the NASDAQ and S&P 500 the index is really going to have to move. Therefore, we believe the highest percentage gain will be from the Russell 2000 in the coming months.