All of the indices are threatening a break to new highs, but the first to do so may be the Nasdaq 100.  The last three days have shaped a small handle, defended by the breakout gap for support, and lurking very close to the breakout threshold at 4,118. Technicals are net bullish although it's underperforming relative to the Russell 2000, which may delay money flow into the index.

Yesterday's decent gain was followed with a consolidation today. The relatively wide intraday range finished with a flat close; a close which remained in the range of resistance. The S&P has a resistance level at 1,987 based on the July high with supply kicking in around September congestion.  This may evolve into a bearish head-and-shoulder reversal: for this to happen, look for a move back to 1,904 (August swing low) without a close above 1,987.  Technicals are bullish, along with the bullish trend in the 200-day MA, so a head-and-shoulder reversal would run against the technical picture. The Nasdaq is coming up against former support turned resistance, and may offer itself as a shorting opportunity. Meanwhile, the Russell 2000 is trading around its 200-day MA. Given the relative leadership of this index, and the fact other indices have breezed past their respective 200-day MAs, I wouldn't look for the Russell 2000 to linger here for too long as it continue

An excellent day for bulls, particular for the Russell 2000. In the case of the latter index, the Small Caps Index broke declining resistance and 200-day MA in an almost a 3% gain. There was also an uptick in relative performance of the Russell 2000 against the Nasdaq and S&P.  This is well placed to continue into a test of the June high (with the September high next).

A rapid bounce, a one-day sell off which looked like something more, then a return to buying. There were important breakouts, but shorts are not out of the game yet. On the breakout front there was the S&P. Yesterday's selling didn't return below support and today put some distance on it. The 50-day MA may play as resistance tomorrow, but given it has flat-lined it may not play as big a role in this regard.

Sellers were going to make an appearance at some point and today was the day they paid a visit. Whether a larger pullback emerges will depend on events over the coming days, but today's selling did occur at some natural attack points for shorts. The S&P finished with a 'bearish cloud cover,' but it did manage to hold declining resistance turned support. The 20-day MA has also entered the fray as an area for bears to work. But this wasn't the most bearish of the indices, and today's finish actually gives bulls a long play tomorrow (for a bounce off support).  Technicals also suggest a bounce.

A fourth straight gain has probably caught bulls by surprise in as much as it has hurt bears. What I had thought would evolve into an Adam-and-Eve bottom may instead become a plain 'ol "V"-bottom. What this sequence of gains does is it generates lots of underlying support for buyers to step in on the next sell off. The S&P was able to break declining resistance and close above its 20-day MA. Volume climbed to register accumulation, although overall volume was well down on earlier selling.  Bulls would probably welcome some tight action near today's highs to help digest these gains. Today didn't give any indication of a bear attack on the 20-day MA.

Today had the kind of action which allows bulls sleep easy: steady buying action from start 'til finish. If there is a concern, it was opening gap downs which greeted some indices. The semiconductor index didn't deliver on its island reversal, but it may yet do so tomorrow. Those who bought today's open will be sitting pretty. What may contain bullish enthusiasm is the presence of overhead resistance at the 200-day and/or 20-day MA, but I still like this for an opening upside gap.