One step forward, two steps back.  The only consolation to today was that trading volume was down on yesterday's.  The Nasdaq is holding circa 14,900 support whie the S&P was able to find buyers around its 50-day MA - but not before it undercut breakout support. Meanwhile, the Russell 2000 didn't make it past neckline resistance.  Despite the loss of breakout support the S&P has two chances to recover the losses; the first is where the index finished today - at its 50-day MA, the second is channel support - currently around 4,650.  We do have 'sell' triggers in the MACD and On-Balance-Volume, but momentum remains on the bullish side of the midline.

With Christmas behind us, traders made their return but control of the market has not yet been decided. The best of the action came in the Dow Jones Industrial Average as it broke resistance of the potential 'double top' on higher volume accumulation. Technicals are net positive and the index is making a relative gain to its peers. Will this strength feed into the S&P?

While trading volume was down over the holiday period, there were significant technical changes as resistance was challenged and broken across lead indices.  The biggest move came with the S&P as it pushed above 4,725 and managed to retain this key breakout with modest losses over last week. The big question is whether it will be able to hold this breakout once traders return from holidays.  In support of this was a MACD trigger 'buy', an acceleration in trend strength as measured by ADX, and a return to overbought conditions (in momentum) - necessary for a sustained rally. The index is still outperforming the Russell 2000, but it is losing ground to it.  It's an important move and one which could set up a positive quarter - but it needs some volume buying to back it up and we haven't had it yet, as noted by the 'sell' trigger in On-Balance-Volume. 

The past few days has seen indices rally back to resistance, or at least reaffirmed support. Given the action, it's looking increasingly likely this status quo will continue through to the end of the year and it will be the New Year before there is a decisive move one way or the other. For the S&P, this measn we have a trading range defined by the highs of November and the swing lows of December.  Another tag of resistance would likely mean a breakout will follow as triple tops are rare and it seems unlikely we would see one here.