It was a good response from buyers to push markets higher through the day. However, the gains didn't really change the larger picture where markets remain range bound. In the case of the S&P, bulls really need a break of 2120 to bring confidence back to buyers. The S&P is also enjoying the start of a relative performance advantage against the Russell 2000.  It's early days, but today was a good start.

Sellers hit indices hard on Friday, leaving markets vulnerable to breaks of nearby support. The S&P managed to find some traction at trendline support and 50-day MA, but it won't be able to handle any further loss on Monday. To add insult to injury, volume climbed to register as distribution, and there were 'sell' triggers between +DI / -DI and On-Balance-Volume.

Sellers had a crack at reversing the breakout in the Russell 2000, but were unable to deliver a reversal. The index traded a very narrow range as technicals remained on the bullish side.

Today there was no surprise to see a breakout in the Russell 2000 after the lead-in it enjoyed. The Russell 2000 also enjoys relative leadership against both the Nasdaq and S&P.  The current advance is bound by a rising channel, but is also at new all-time highs.

Markets suffered heavy selling during early action, but were able to regain a large section of lost ground by the close. Large Caps had the best of the action, skewing buying towards more defensive issues, not surprising given the early scare. The 20-day and 50-day MAs have converged, and these played as a rally point for longs. Technicals retained their bullish picture.

Declan  Why is it traders like you and your ilk are uber- bullish in perpetuity? You write as if these indices have minds of there own, when in reality they are manipulated And propped up by primarily dealers trying to give the appearance of healthy indices... It never ends... The most hated bullshit market of all time.. Hi Peter, I don't think I'm uber bullish, more apathetic bullish. I would be happier to see this market take a dive so I could put my cash holdings to work instead of having them sit in the bank earning nothing!  If you look at the end of every post I show two tables which highlight levels where markets typically find historic extremes. Based on where markets lie now, there is no extreme. So one has to work with what's gone before, and that's a 6-year bull cycle which hasn't show signs of slowing.  People may think 6-years is a long time, and for many a bull rally that has gone before, it is. However, there was an 11-year gap from 1

It was not surprising to see the challenge of all-time highs rebuffed in the Nasdaq and Russell 2000. These were the indices most likely to see the benefit of buying strength, and both started off well. However, as the day wore on, bears were able to squeeze bulls out of their positions. Both of these key indices closed at lows. The Nasdaq finished with an inverse hammer as it attempted to challenge the 'bull trap'. Volume climbed from Friday to register distribution, although it wasn't particularly high volume overall. Tomorrow may see some follow through down, but there is plenty of support to work with, starting with 20-day and 50-day MAs.