First there was the break of the April-July channel, then there was a new down channel marked from June-July, now there is an upside break of the June-July channel. Whether the modest breakout for the S&P marks another shift back towards bulls - today was significant in reversing a picture perfect rebuttal at channel resistance. Thursday's was also enough to reverse a 'sell' cross between the +DI and -DI. ($SPX) via StockCharts.com " The Nasdaq also crept out of its major April-July channel but the concern is the proximity of the 200-day MA directly overhead. Hard to say if this is a true breakout? Relative strength is swinging back to more speculative tech stocks from safer large caps - a bullish development - particularly when the last (bearish) signal was June 1st. ($COMPQ) via StockCharts.com Small Caps also cracked above its downward channel, although technically it's in worse shape than either tech or large cap indices. ($RUT) via StockCharts.co

Bernanke stuck a fork in the rally as markets gave up yesterday's gains. The day's highs did enough to test resistance but nothing more. Volume edged higher to mark confirmed distribution for all key averages. The S&P is close enough to suggest a test of Tuesday's lows with subsequent targets of 1,049 and 1,011. ($SPX) via StockCharts.com The Nasdaq touched channel resistance which is in close proximity to the 200-day MA; 2,152 is bulls last stand before a trip to 2,050 looks on the cards. ($COMPQ) via StockCharts.com Small Caps reversed off the 20-day MA which itself lies close to channel resistance. Trending lower and underperforming to lead averages. ($RUT) via StockCharts.com With today's disappointing action, Thursday is looking like it will be another down day for stocks. Follow Me on Twitter Build a Trading Strategy Business in Zignals Subscribe to one of 58 trading strategies covering US, UK, Canada, Forex, ETFs, Frankfurt, Australia

Where yesterday was a little mixed with indecision, today bulls took the opportunity to stamp their authority. The S&P enjoyed a higher volume accumulation day but remains range bound by my newly defined down channel ($SPX) via StockCharts.com Similar story for the Nasdaq with support at 2,152 holding. ($COMPQ) via StockCharts.com Small Caps enjoyed a bullish engulfing pattern to yesterday's doji ($RUT) via StockCharts.com While the SOX dug in at the 200-day MA with a doji ($SOX) via StockCharts.com With resistance overhead it's likely to be a relatively quiet day but should bulls clear newly defined down channels it could be another day for closing at the day's highs. Breadth indicators still edge in favour of a bottom. Follow Me on Twitter Build a Trading Strategy Business in Zignals Subscribe to one of 58 trading strategies covering US, UK, Canada, Forex, ETFs, Frankfurt, Australia or Irish Markets Dr. Declan Fallon, Senior Market Techni

No surprise to see modest gains following Friday's sell off. Volume was light which reflected the lack of true conviction on the part of buyers. For the S&P it has been a strange past couple of weeks. The S&P shifted from a bear trap to a bull trap as the rate of descent from April's high slows. I have redrawn a new channel which reflects this new rate of loss. ($SPX) via StockCharts.com But the Nasdaq has not shifted course and remains in its dominant downtrend. ($COMPQ) via StockCharts.com Small Caps are struggling inside a narrow channel and below all key moving averages. Relative strength has swung sharply away from the Nasdaq and S&P - a distinctly bearish scenario. ($RUT) via StockCharts.com With the new channels in place it's now a matter of tracking their relevance to the existing trend. Follow Me on Twitter Build a Trading Strategy Business in Zignals Subscribe to one of 58 trading strategies covering US, UK, Canada, Forex, ETFs,

Friday was a rough day for the markets and left the mini-rally in tatters. What had Stockcharters to say about it? Richard Lehman of the Channelist.com kicks off with channel breaks: 7/18 -- Short term blue minis all broke Friday and long term declining purples held. The long term trend wins, and right now the direction is quite clear. The new red minis that began Friday cannot all be drawn yet, but the breaks and the direction are indisputable. The ultimate downside target on the long term purple channels could be 8-10% down from here, but lets see how it plays out before we bet the farm on short positions. Earnings reports are still liklely to cause volatility in the next few weeks. 7/15 -- A number of short term minichannels have now changed slope but are still trying to climb, so I've drawn them as larger green channels now. Volatility dropped sharply when the breaks did not follow through to the downside. The dollar keeps dropping, but Toronto stocks sure had a nice

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