Markets were poised for gains Thursday but then a slew of poor earnings estimates and sagging consumer confidence stuck a knife through the heart of the rally. On weekly charts this was flagged as gravestone doji on the backtest of former bear flag support - a bearish confirmation signal. The S&P closed at 1,062 which marked former long term support but is also the neckline for the head-and-shoulder reversal which - despite the week's advances - finished on the line (keeping the reversal in play). Weekly volume rose to confirm a distribution week and with stochastics not oversold it could be another long week for the S&P. ($SPX) via StockCharts.com The Nasdaq is a little stronger only because it's above the reversal head-and-shoulder neckline, but like the S&P looks set to close lower next week Nasdaq via StockCharts.com The Percentage of Nasdaq Stocks above the 50-day MA dropped below the 30% trigger line - the scrappy action is making for a volatile lo

The market outlook for today is at best, mixed . Individual stocks will find it hard in this environment to attract a bid, particularly if resistance is nearby to offer supply (as is the case for the Nasdaq ). Going back through my breakout picks there is one stock which has enjoyed strong gains without (yet) going parabolic. Heartwave ( HTWR ) was one of the 31 breakout candidates from June 25th. The stock failed to push on from the breakout, but the subsequent pullback was on low volume and selling momentum has eased following an initial sharp drop. The stock is currently catching a bid around $65. Bears might take a more skeptical approach and view the tight action around $65 as a prelude to a breakdown; in light of this I would be looking to use a relatively tight stop and have created a Zignals Trading Idea with a stop at $63.79 (you can get my trading ideas by email by following this link - free registration with Zignals required). Alternatively, set a Zignals Alert for a

It was a tricky day for markets. On the positive side, Large Caps held their channel breakouts and are nicely positioned to build on yesterday's gains; volume eased in line with a bullish consolidation. ($SPX) via StockCharts.com On the more mixed side were the Nasdaq and Nasdaq 100, in each case there is indecision at converged 50-day and 200-day MAs but the Nasdaq is also up against declining channel resistance. Technicals of each have turned net bullish so there is momentum to drive a break. ($COMPQ) via StockCharts.com The hardest hit was the semiconductor index. After a strong day yesterday, today it finished with bearish cloud cover. Not the ideal scenario to help drive Tech averages higher. ($SOX) via StockCharts.com For Wednesday keep an eye on the Nasdaq and watch for upside follow through in the S&P and Dow. Technicals suggest there is more upside in the tank but markets remain vulnerable with the sequence of lower highs and lower lows intact. Follow Me

Bulls will be looking to press yesterday's advantage off the back of strong Intel earnings so this optimism should spread to other technology stocks. I had to dig through my past breakout scan results to come up with a stock for today. Today's candidate, Rubicon Technology ( RBCN ) - a specialized semiconductor company, featured on June 14th and could see some love over the coming days. Unlike many of the breakout stocks which have featured this past month it was one of the few not to reverse the qualifying (June 14th) breakout. The stock is engaged in a strong up trend dating back to market lows of March 2009, less the negative consequences of the past 3 months. It is nicely poised to break $34 resistance; a tight stop could go on a loss of $32, but if you wanted to give the trade some room place the escape hatch on a loss of $30. As for upside potential, the 1-year Analysts' estimate is $35.83. Five analysts have 'buy' rating, one an 'outperform' a

The tension of the past couple of days released to the upside which kept momentum with bulls. Volume was mixed which undermined the extent of the gains for some of the indices, but there was substantial technical improvement - particularly for large cap indices. The S&P cracked above the declining channel and finished on the 50-day MA. Technicals are net bullish which was last achieved in February so it's a significant improvement on activity for recent months. ($SPX) via StockCharts.com The Dow was similarly impressive, going one step better to finish on its 200-day MA having started the day at its 50-day MA. With technicals net bullish and all key moving averages cleared it is the most bullish of the lead indices. AAAAAAAAE Dow Jones Industrial Average ($INDU) via StockCharts.com The index to watch tomorrow is the Nasdaq; today finished at converged 200-day and 50-day MAs with a 'Death Cross' imminent. However, it also registered an accumulation day. Unlike

Another stock from the June 25th collection of breakouts , Merge Technology ( MRGE ). On June 25th the stock emerged from a triple bottom (with a $2.81 neckline) on strong volume. It followed with a 'bull flag' that held support between $2.88 and $2.93. The 'bull flag' broke last week although Monday saw prices retreat back to $3.04 from $3.21 - but didn't drop far enough to invalidate the 'bull flag'. Whether buyers will be willing to bid MRGE up should the broader market ease back after a series of tightening gains remains to be seen. The 'bull flag' low of $2.88 would need to hold to maintain the momentum of the two month rally from $2.00. As for upside potential, the breakdown gap from last November is a useful starting point. I have offered a Trading Idea for a push to $3.49 with a stop at $2.88; alternatively - a Zignals Stock Alert can be set for a price cross of each. Analysts have a 1-year consensus target of $3.60 with two '

Bulls did what they had to do to register a higher close, but did little to challenge the prevailing down trend. The S&P saw a close over its 20-day MA with Friday producing a MACD trigger 'buy', with on-balance-volume and intermediate-term stochastics close to 'buy' triggers too. The tight "coiling" action of the past couple of days will unwind soon. Should the unwind push prices higher there is a good chance the downward price channel from April will break as part of the unwind. ($SPX) via StockCharts.com The Nasdaq closed below its 20-day MA but had a MACD and on-balance-volume 'buy' trigger. Volume rose to register a modest accumulation day - but really, overall volume remained light. ($COMPQ) via StockCharts.com Small Caps created a 'bear trap' with Friday's higher close but remains troubled by 20-day (and likely 200-day) MAs overhead. However, Monday's losses weren't enough to question the validity of the 'be