The indices had a solid follow-up session to last week’s surge, and you got key breakouts on most of the important indices. Only an afternoon pullback prevented them from closing at session highs, but they held on a big chunk of the gains.

As indicated the day started out with a surge from the get-go. They made a very strong morning run that took the indices back over 1800 on the Nadasq 100 and over 1350 on the S&P 500. They extended higher, got up to almost 1820 NDX and 1360 SPX, before the pullback brought them back to the closing levels.

Net on the day the Dow was up more than 187, the S&P 500 more than 20, the Nasdaq 100 nearly 62 1/2, and the Philadelphia Semiconductor Index (SOXX) up 12.61, a gain of 3 1/2 percent.

The technicals were very strong, particularly on New York where advance-declines were 4 1/2 to 1 positive. On Nasdaq it was 3 to 1 positive. Up/down volume was the story, though, 4 1/2 to 1 positive on New York on total volume that was a bit lighter than I'd like at 1.56 volume. Nasdaq traded 2 1/2 billion shares, and was 3 1/2 to 1 positive on advancing over declining volume.

TheTechTrader.com board was extremely strong. The star of the day was Bear-Stearns (BSC) once again, up 5.29 on 136 million on an increased offer from JPMorgan. CIT Financial (CIT) followed along, up another 3.40, closing at 13.03 on 33 million. Also in the financial services sector, MBI jumped 1.40, MF 72 cents, and WM gained 40 cents.

DryShips (DRYS) gained 3.94, TBS International (TBSI) 2.18 and Excel Maritime (EXM) 1.83 in the strong shipping sector.

Chinese stocks were strong. Portfolio position Chindex (CHDX), which we added today, was up 1.68. Portfolio position Agfeed Industries (FEED) was up 1.08 to 12.80. China Natural Resources (CHNR) was up 1.20. China Finance Online (JRJC) gained 80 cents. Chinese hotelier Home Inns & Hotels (HMIN) was up 1.91, and Chart of the Week Yuchen Technologies (YTEC) up 1.89.

Other gains of note, Junior solar plays did well, Energy Conversion Devices (ENER) jumped 1.38, JA Solar (JASO) up 1.11. Solarfun (SOLF) was up 83 cents Canadian Solar (CSIQ) 80 cents and ASTI +53c

On the downside, point-plus losers included LEH, which gave back 2.01, and PC Mall, which knocked back for 3.50 after a huge gain on Friday.

Stepping back and reviewing the hourly chart patterns, the key to today's action was that the indices broke through key multi-week resistance and extended, taking the Nasdaq 100 back to the mid-February highs near the 1820 level and the S&P 500 near the late Feb resistance zone around the 1360-62 area. It's likely, based on the patterns I'm seeing, that we should get an extension of this rally, but we may get an initial retest first.

However, the levels we'll be looking at and hopefully able to reach over the next few days are the S&P 500 1390-95 zone and the Nasdaq 100 1860-70 area, perhaps even as high as the 1890-1900 area.

Harry Boxer is a technical consultant to many Wall Street hedge funds and large institutional traders, and author of TheTechTrader.com, a real-time diary of his day, swing and intermediate-term trades. For more of Harry Boxer, sign up for a free 15-day trial to his Real-Time Technical Trading Diary, or sign up for a free 30-day trial to his Top Charts of the Week service.