At the risk of stating the obvious, last week was highly unusual. Looking deeper, what can we assess from a market that went from threatening to break the 200 day moving averages at the beginning of the week to ending up 5% by week's end? This sort of activity has only happened 43 times since 1950. In other words, this was the 29th best week in over 3207 weeks since 1950. So, rare? For sure. Violent 5% shifts typically occur around extreme market stress. Therefore, one might conclude that a market that goes from extremely oversold into a relief rally that clearly gets carried away, is exhibiting instability. The Greece austerity plan and the ISM number were factors; a "I don't want to miss the boat" psychology prevailed and technically, the week left the market extremely overbought but certainly in a bullish phase.

SPY closed up 1.5% on Friday as did QQQ. Both had Accumulation Days in volume.

Similar story in IWM. It (as well as the other indexes) broke out from a trendline that connects from the highs made on May 2nd to the last swing highs made on May 31st preceding the dump to the 200 DMA. That last swing high is 84.86. With a close on Friday at 84.03, at this point, the risk/reward for the long side is out of whack. There is underlying support where both the 50 DMA and the retracement to the trendline sit.

With QQQ the support comes in at 56.50 area and SPY, 131.40 then 130.

Since a major concern for any new long positions is risk, other than using tight stops for the more active traders, I am inclined to wait for a dip or at the very least digestion at these high levels until  the overbought condition abates before going aggressively long now. We had huge gains over the last two weeks in the bigger and midcap stocks, took profits along the way even though we are still long what we call a "tail" of the original entries with big cushions for swing trading.

Featured ETFS: I am purposely omitting writing about the sectors and groups that have been leading the way such as IBB, XRT, and IYR as they are all highly extended but very bullish. As with the indexes, I will be waiting for a correction before considering a new entry.

SMH once it broke from 33.50 it rallied right up to the 50 day moving average. What might come as a surprise is that the slope on the 50 day moving average is still down. The semis will be a good area to watch since they ran into resistance, the downward sloping 50 day moving average and are overbought. There is good support at 33.50 down to 33.30. If it breaks 34.10, then I would anticipate a test of these underlying areas. Otherwise, a close above 50 day moving average and the next overhead resistance is at 35.25.

XLE confirmed back into a bullish phase, but underperformed the rest of the market on Friday. Has underlying support around 74.45 where the exponential moving average is. Unlike semiconductors, this ETF never broke the 200 day moving average. The energy sector is a good one to keep an eye on for a correction and buy opportunity. In OIH, like to see a dip down to 149.80.

DBA**with the strength of the market this was unable to confirm into a distribution phase, testing and holding the 200 day moving average. The overhead 50 day moving average is still declining even with the rally. Under 32 a sign of weakness.

SLV was short this early last week, but covered in the market began to firm. It's been holding the exponential moving average.. Now, a break of Friday's low and we should see a further decline in silver with best underlying support at the 50 weekly moving average.

FXE what is interesting on this chart is that a gap left from June 8 has not filled with the most recent high made last Thursday. We could see a correction. UUP is in a bearish trend, but held the low from Thursday. With oversold conditions, could see a strengthening of the dollar with overhead resistance. Overall, the trend in the Euro is bullish therefore I would regard any correction short-term basis

FXI has now rallied up to significant resistance after an impressive rally back above the 200 weekly moving average. Since the daily moving averages are still in a death cross, we could see a retest and possible breakdown of the 200 weekly moving average.

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