Last week, there was an opportunity for shorts to attack the returning bounce back to the channel (which was stopped by Thursday's breakout). Now, there is an opportunity to build on breakouts and re-establish rising channels. The S&P returned a MACD trigger 'buy' with relative performance against the Russell 2000 on the verge of a new 'bullish' crossover.

A shaky start to the week has so far managed to hold on to Friday's gains. The small gaps haven't filled although they are not true breakout gaps as we are still waiting for the actual breakouts. But, it's healthy action and the possible short opportunities mentioned from the drop outside of the channel don't look likely to succeed. The S&P is no longer in its rising channel but a slower advance may be emerging. The MACD is still on a 'sell' signal and relative performance remains on the bearish side.

Sellers made a return after a couple of days of gains; losses were light and on small volume but there was no desire to take markets to new all-time highs as profit takers were the more active parties. Shorts will have had a chance to take a position to then sit and see what happens - but any new high would quickly see those trades run for the hills. Shorts will be riding the S&P MACD 'sell' trigger and index relative underperformance, with a stop above 3,155.

After the channel breakdowns last week indices now face the prospect of challenging former support of these channels. Shorts may try and force the issue although any gains would be enough to see new multi-year highs and likely return many of these indices inside these channels. The S&P did register a bullish accumulation day as part of its channel challenge. Shorts will take comfort from the maintained MACD 'sell' trigger and continued relative underperformance against the Russell 2000 (although this is bullish for the broader market).