It seems that just about every asset class at some point in its recent overbought condition has managed to correct its excesses -- except in the equity averages. Lately, the bond market has pulled back significantly, and prior to the bonds, oil and gold. At some point, now that everyone is enamored with equities, they too will feel the effects of gravitational pull.

Letâ�,��"�s look at the Nasdaq 100, through its tracking stock, the QQQQ. Tuesday was the Qâ�,��"�s fourth session circling the 41.30/80 area, which exhibits technical characteristics of â�,��"peakâ�,� on my hourly charts, but not yet on the enclosed daily chart.

Letâ�,��"�s notice that during the intermediate-term top-building process that occurred between January and May, the Qâ�,��"�s carved out a formidable sideways (now resistance) plateau between 41.25 and 42.60, which the current upmove is attempting to â�,��"chew through,â�,� as we speak.

It seems to me that given the unimpressive volume â�,��"expansionâ�,� recently, coupled with the stall in momentum (just beneath the overbought plateau), that the Qâ�,��"�s will be hard-pressed to make much headway to the upside in the effort to hurdle the heavy January-May resistance plateau.

On the other hand, the stair-step uptrend off of the July lows into todayâ�,��"�s high has NOT (yet) had one pullback that has broken beneath a significant prior pullback low, which is needed to break the back of the uptrend.

At this juncture, the Qâ�,��"�s need to break 41.20 to inflict initial damage to the uptrend. Right now my work indicates that we stay positioned short for the conclusion of the nearest-term portion of the upmove off of the October 2003 low at 39.88, which could present itself at just about any moment now.

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.