The indices grabbed the headlines , but it may be a short lived given new market highs have not been supported by breadth metrics. The Nasdaq gapped higher and was supported with a MACD trigger 'buy'. If this is a true breakout, then the gap can't close; infractions into the space suggest weakness and will run the risk of a rapid move back to its 200-day MA (effectively, a false breakout) to the extent it would be a more attractive short play than a pullback buy. Until then, caution advised for bulls.

Markets posted a follow through gain to Friday's morning recovery, although volume was down.  While the market is doing a good impression of a bounce, it continues to experience expanding breadth weakness.  However, in a positive, 20-day MAs were regained as support. The S&P is just 5 points from a new closing high and tomorrow may be the day it completes the pullback.  The S&P is the lead index of the Russell 2000 and Nasdaq threesome.  If  a new high is posted it should come with a MACD trigger 'buy'.

This week's fashionable tip is Estee Lauder.  The fundamental view can be read here . This stock is on the verge of a break of $64.50.  Although the stock is contained by resistance, it does have the benefit of a MACD trigger 'buy', along with a leading breakout in On-Balance-Volume.

Markets staged a respectable recovery after Monday's sizable losses. However, the indices weren't able to stage as great a recovery in breadth as was achieved for underlying price. The Percentage of Nasdaq Stocks Above the 50-day MA made it back to 60% after starting the week at 55%.  However, it is well off the 80% high posted a few weeks ago.

Four stocks featured in my latest Fool post here . The technical picture is provided below: Eli Lilly is held in my investment portfolio. The stock cleared $52.83 on modest volume and saw a pick up in volume as the stock made a confirmation test of $52.83. There is a narrowing rising wedge which - if fulfilled - will break downwards. A breakdown could evolve into a false breakout, but should this happen, look for a defense of the 50-day MA.

While the rally flattens out, there is one side of the market which has sided with the bears, and that's the number of distribution days. The S&P has experienced five consecutive distribution days since the last accumulation day. However, On-Balance-Volume has maintained its accumulation trend, although it's under pressure from bears. Relative strength has shifted in favour of the S&P, which is bearish for the broader rally - although better news for the S&P.

Big gains, but modest volume. The battle is on to decide whether yesterday's action marked a swing low, or if markets are in the process of shaping a top. Technicals and breadth indices suggest this is a top and the current bounce is nothing more than a relief move. But, a new all-time high will have to be respected, despite what technicals may otherwise suggest. But we are not there yet. The S&P didn't make it as far as its 50-day MA before bouncing.  The 'sell' in the ADX was reversed.