A solid close to the week left markets well positioned for further advance on Monday. The S&P finished Friday with an inside day (to an inside day), with a close knocking on the door of 1,690.

Not surprising to see markets ease lower on light volume. It's a buyers pullback, although there is room for further weakness tomorrow without bursting the bubble. The S&P has the 50-day MA to lend a hand as support.

In positive action, markets were able to hold on to the gains from yesterday and in some cases add to them. The S&P enjoyed a day of confirmed accumulation, pushing the indices away from 20-day and 50-day MAs and keeping them on a path to channel resistance. The S&P is running a rally similar to the one experienced in June, and so far there is little reason to suggest it can't emulate its gains.

While the buying volume was not spectacular, there was enough action from bulls to see the basis of a rally build. For the S&P this meant a net bullish turn in technicals.

A double confirmation for bulls: a negation of the August 'bull trap' with today's breakout and a failed measured move target lower. Technicals are all bullish, although the ADX is below 20, indicating a trendless environment. However, I suspect today's breakout will change this.

A scary start for the markets on Friday was quickly reversed, but buyers were prepared to defend the lows of late August/September which is good news for those looking for further upside. Volume climbed to register an accumulation day, although there are still resistance levels to overcome. The S&P closed just above its 20-day MA, but below its 50-day MA. Buyers were able to take the market all the way to its 50-day MA - but not beyond.

Indices which started the day just below moving average resistance, finished the day still stuck under such resistance, despite the minor gains posted. Only the Nasdaq came into the day without such resistance to worry about and it was able to put some to its 20-day MA.