The momentum in the NQ is obvious. The earnings and the reaction of MSFT and FB shows that there is still great interest in buying these stocks at these levels. I am looking at the SMH as it seems to reached a high. Lets see how it acts and if the NQ is even affected. The NQ has already reached the 2nd target I posted last night. I have higher targets posted this mornings which might be an area for a contra type trade. The ES seems like its been dragged up and still has not taken out the ATH intraday of 2940 in the SPX. My guess is it will. Interesting to note that the FXI and EEM have not been participating in this last leg up.

TELLS

IWM – looks lower. It got some legs above 158.10 are and topped out at 158.69. This can be a problem if it breaks the 157 area ( 157.37)

CL and XLE – crude high 66.60 and support 65 area. XLE also like IWM could not hold higher. Now the 68.61-80 is res and it needs to hold the 67 area.

XLF – has been hanging near some critical highs and not backing off. 29.52 upside would bring it to a test of the 28.35 area. If it fails it would need to hold 26.9.

XLV – no longer oversold on RSI. had an inside day yesterday

IBB – similar to XLV

SMH- looking toppy in short term

XLK – monster . similar to SMH

GOOD LUCK AND BE CAREFUL WITH ENTRIES.. DON’T FORCE TRADES

Now that the markets have made the headlines with the spx making a new all time closing high I am expecting more activity in the markets overall. The low in the VIX was 11 last week and with a new closing high the VIX is above 12. This is something to watch. Also, to put things in perspective while the SPX is approaching the intraday trading high of 2940 the NDX has taken out it old intraday high of 7700 closing at 7810ish – 110 points above. The NDX is overbought using RSI. The SMH is also ob on the RSI and well extended above the 8 day. I am thinking there might be a nice mean reversion trade in the NQ coming. The set up would need to be into strength. If there isn’t a another push I think sellofs should be bought.

IWM – lagging but moving up with the other indexes. A move above and 158.10 area could lead to a test of the 159.5 prior high.

CL and XLE – crude has an inventory number at 10:30. The XLE is still at the 200. The next test would be 70.37 area.

XLF – has been going sideways lately. 27.10 support with 27.46 as res.

SMH- very extended from 8 day OB RSI and at band high. Weakness here could lead to that mean reversion trade in the NQ

XLK – the monster is also very extended – similar to SMH

IBB – XLV bouncing back. XLV res 88 with support 85.29. Its very oversold on daily RSI and expect it to stay bid which would be a plus for the SPX.

LOOK FOR SET UPS AND TAKE POFITS!