There wasn't a whole lot going on today except Small Caps were able to attract some buyers despite finishing below resistance; bulls have been taking advantage of the 20-day MA test. Today's action coincided with 'buy' signals in the MACD and +DI/-DI.

Given overnight news and Netflix disappointment I was surprised to see markets finish as strong as they did given comments on the economy by the Fed Chairman. The S&P opened at support and 'engulfed' the prior day's trading; it's not a true bullish engulfing pattern as this is a reversal pattern and what we have is a breakout but it does contribute to a confirmation of the breakout.

Large Caps and Tech indices enjoyed a good week with breakouts holding by Friday's close. There was no real volume on the breakouts but new highs leave markets in a position to attract sideline money. The S&P didn't do a whole lot on Friday but it remains on course to test channel resistance. Technicals are all in the green and the previous period of underperformance against the Russell 2000 looks to have shifted back in Large Caps favour.

Tech Indices are not waiting on the Semiconductor Index aa both the Nasdaq and Nasdaq 100 closed at new all-time highs. The Nasdaq 100 had the best response with a clear breakout. This move accelerated the relative advance against the Russell 2000 setting things up nicely for a challenge of upper channel resistance.

It was by no means a disaster but there was an ominous feel to Wednesday's close. Bulls had used the momentum built by last week's gains to make a run at all-time highs but profit takers and shorts used this as an opportunity to get out/build a position. It's a typical stage I reaction to a resistance test but now it's a question if there is enough sideline interest from bulls to drive a break to new all-time highs and force today's shorts to cover. The S&P left a small 'bull trap' on low volume. Technicals are net bullish so if bulls can come back and reverse the 'bull trap' it would nicely set up a run to test newly drawn channel resistance. But for now, shorts look favoured.

The past couple of weeks have been a period of give-and-take but Friday broke the mold by marking a second day of gains for many of the indices (four for the Russell 2000). More importantly, it took markets above resistance and into a position where they can mount a challenge of June highs.

Tuesday delivered another shift with sellers coming back, although not to the same extent as Monday's buying. The net result was to leave trading ranges in key markets. Until there is a break we won't know where the nest move will come but it will keep people on the sidelines until there is a resolution.