The indices ended firmly higher on the day near the highs for the session, but underwent a severe test at mid-day that was successful.  The day started out with a move up, which didn't last too long, and then they moved down steadily and accelerated into the lunch hour, and found their lows for the day at secondary support at 1535-36 zone on the NDX and at the 1184-85 area on the S&P 500.

The indices then embarked on a two-step rally, which took them to new session highs on the NDX in the last hour, fell short of confirming that on the S&P, but closed near the highs for the day.

The Dow was up 60 3/4, the S&P 3 1/2, the Nasdaq 100 5 1/2 and the SOX Index up 2 points.

The technicals were fairly unimpressive, particularly on Nasdaq, where advance-declines were negative by about 170 issues.  New York was positive by 265 issues.  Up/down volume was 9 to 5 positive on New York on total volume of just under 1.5 billion, and 7 to 5 positive on Nasdaq on a total about 1 1/4 billion.

TheTechTrader.com board was mostly higher, led by JAMDAT Mobile (JMDT) up 2.12, Momenta Pharmaceuticals (MNTA) 1.08, and Rediff.com India (REDF) up 90 cents.  Evergreen Solar (ESLR), one of our Charts of the Week and a new model portfolio position, was up 59 cents on more than 2 million shares.

BioCryst Pharmaceuticals (BCRX) continued its tremendous advance of the last few days, up another 90 cents on 21 1/2 million shares.  Neoware (NWRE), also a Chart of the Week, was up 85 cents, Kendle International (KNDL) 89 cents, and Spire Corp (SPIR) 57 cents.

On the downside, there were some very small fractional losses in just a few stocks.

Stepping back and reviewing the hourly chart patterns, the indices followed through on Thursday and Friday's rally.  Although they were severely tested mid-day, they came through with flying colors and ended up positive on day, successfully retesting the 40-day moving average on the hourly charts.

Overhead resistance exists around 1190 on the S&P, which it closed just beneath, and 1550 on the NDX where we also closed.  So, we'll see if they can pound through those resistance levels tomorrow and extend the three-day rally.

Good trading!

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.