Just like watching paint dry....it looks like the turn is taking hold. I noticed today that stocks such as DHI and KBH had their widest range down today and off 3.9%.

We are not alarmists but do want to continue to show that the S&P remains into the MFU-4 and MOB target zone, which has us on alert for at a minimum for a pause, and at most, a pullback from this area.

Both the S&P 500 and Nasdaq Composite are within target zones where we can expect a pause or pullback to occur. If it is the start of a pullback, we need to wait for negative money flow units to form to determine the downside projections.

What we get from here remains to be seen, but when an MFU-4 target is achieved on a weekly or monthly basis, we start to take profit and look for shorts.

The TLT came 0.63 cents from our $154 MFU-2 target, which typically will produce a strong countertrend rally. We will look to reshort in the coming days with the expectation of another leg down to the MFU-3 target of $145, which is what occurs 70% of the time when a negative Money Flow Unit is formed.

We are sending this out not only for tactically oriented clients but also for those that might be looking for a good opportunity to buy a pullback after today's strong rally. Given the ellipse sell signals generated with today's rally, we are taking a small short in the S&P 500 emini futures with a tight stop just above today's high.

The S&P has broken well below its regression trend channel with an expansion of downside momentum.

The weekly charts of the S&P 500 and Nasdaq Composite shows these indices right at their uptrends and appear ominous to break lower

We have both the S&P 500 and Nasdaq Composite both grinding lower after turning down from their short-term money flow units (MFU), and approaching important support zones.

We have the S&P 500, Nasdaq Composite, Mid-Cap (MDY), Dow Transports, and Dow Utilities all into target zones where we expect a pause or pullback to occur. The strong momentum of the last four days has these targets getting hit quicker than expected.

For clients that trade the QQQ ETF, we are highlighting the next target level on the QQQ based on our proprietary Money Flow Unit (MFU) analysis.

The Nasdaq Composite has gained upside momentum as it advanced above its 50% retracement level. The ratio of QQQ relative to the SPY indicates that the Q's are going to outperform the SPY from here.

The market indices held up well given the news flow last week. Going through the market internals and the number of stocks that continue to screen well on our work, we believe the probabilities for a strong rally from here are at hand.

The NDX has started to take out the recent high range, which is bullish for a move higher.

We will be out tomorrow for the funeral services of a dear family friend and will not be able to send out our Technical Tuesday research piece. Here is an update of the S&P 500 which complements the Nasdaq Composite chart we sent out this morning.