Three weeks ago, I suggested paying attention to the Q's as the leading market, and watching for resistance and channel breakout. Last Friday QQQ broke through multiple resistance at the 59.25-59.35 area, but still remains below channel resistance at 60.
Given the overbought nature of market internals, and the prevailing bullish sentiment, in a normal market environment I would expect a retracement from current levels.
Considering the amount of interest focused on the political games being played in Washington, however, and the uncertain reaction that a debt ceiling deal or lack thereof may provoke, it would be foolish to rely solely on historical precedent. Therefore, my suggestion going forward is to stay with the trend but be very quick on the trigger.
