The S&P Emini 500 futures have come down to the MOB target band and the 50-day average we highlighted in yesterday's Technical Tuesday report, and now reversing higher.  We don't know the magnitude of the advance, but we do want to put on longs to take advantage of this deep oversold condition. The fact that we have a turn from the MOB and 50-day is what we are leaning on. In the back of our minds is if we see a rally that eventually fails as it did in February of this year.

A number of the indices reviewed had a sharp downside reversal last week, which we consider a cautious flag to the advance. We remain cautious the Russell 2000 and Mid-Cap (MDY) and continue to suggest reducing exposure. We are on alert for both the S&P 500 and Nasdaq Composite as these indices approach their near-term support zones. The ratio chart of MTUM vs. SPLV reversed hard from our MOB target level, and we expect more weakness for MTUM. We remain short the TLT.

We now need to see how the index holds the lower end of the regression trend channel at 11180, which, if broken, could extend the decline to the 50-day at 10832.

As noted in this week's Technical Tuesday, the S&P is approaching our MFU-4 target zone which was generated off the March low and a zone where "we can expect at a minimum a pause in the advance, and most often, the start of a pullback". Given the momentum off this high, we believe this is the start of a pullback where we can see the index pullback to the lower end of the regression trend channel around 3390. Below is the updated chart of the S&P which we sent out.

The uptrends for both the S&P 500 and Nasdaq Composite remain intact but approaching target zones where we will be looking for a pause or pullback. We are concerned with the loss of upside momentum for the Russell 2000 and Mid-Cap (MDY) after coming into an area of resistance and target levels. We would be reducing exposure to both those segments of the market. The ration chart of the Momentum Factor (MTUM) ETF vs. The S&P 500 Low Volatility ETF has achieved the MOB target highlighted on August 18. We are taking partial profit right here. Lastly, we remain short the TLT and would be adding on short-term strength.

Both the S&P and Nasdaq Composite have found resistance at their MFU target zones, and it appears that we are starting a pullback, the degree of which we don't know yet.

We are taking a short position in the TLT right here as price reversed at the MOB band and now breaking the uptrend off the June low.

We screened and ranked a number of technology stocks that have a fair amount of short interest in them.  Given the positive model scores and technical structure, these long candidates have the potential of getting squeezed with further strength.  We highlight 12 ideas in the attached PDF.

Uptrends remain firmly in place for most of the indices reviewed, with the exception being the Dow Utilities.  The S&P 500 is getting close to our MFU-3 target area which coincides with the February highs of this year.  We may see a pause in the advance into that area.  Upside momentum continues to expand for the Nasdaq Composite, and we highlight the Software group as an area to add exposure.

Trends for the S&P 500 and Nasdaq Composite remain favorable and we continue to see improvement in the Russell 2000 and Mid-Cap (MDY).  We also highlight three of our top scoring sectors based on our model.

If you are interested in a complete ranking of the MTUM ETF with our top longs and bottom avoids, please let us know.

We got two buy signals in the Nasdaq 100 August Futures this morning.

The S&P eMini achieved our MOB band target of 3280 today and has now taken out yesterday's low.

Bullish breaks today above their respective 200-day averages implies more upside.

Improving upside momentum has both the S&P and Nasdaq Composite ready for another leg higher. The small and midcaps have been in a tight range in recent days, and closing above their 200-day averages would be positive. Biotech recently broke out of a consolidation pattern and poised for another leg higher. We would be adding to this group. The iShares Tech-Software ETF (IGV) had a sharp reversal from support and looks to go a lot higher. We highlight nine stocks that screen well and would be adding to.