The stock market indices had a stellar day on Tuesday and extended the rally sharply. The day started out with a gap up. They pulled back, backed and filled, and then popped until mid-day to the morning highs at 1844 on the Nasdaq 100 and the 1097 area on the S&P 500.

Over the next couple hours they pulled back in a slow, orderly looking flag-type pattern, and then came on again in the afternoon to new highs, above 1850 NDX and just under 1100 SPX. In the last 10 minutes they backed off rather sharply and took back a small chunk of the gains, but still ended up with a big gain on the day.

Net on the day, the Dow was up another 146.75 at 10,363.02, although the high for today was over 10,400. The S&P 500 was up 16.59 at 1095.34, about 4 points off its high, and the NDX up 24.00 at 1845.03, about 6 points off its high.

Advance/declines, however, were sharply higher by about 7 to 1 on the New York Stock Exchange and about 7 to 1 on Nasdaq as well. Up/down volume was about 11 to 1 positive on New York with total volume of about 1.1 billion shares today, and about 12 to 1 positive on New York with about 2 1/4 billion shares traded.

TheTechTrader.com board, as a result, had a very big day today. Most of the stocks on the board were up, other than Apple Inc. (AAPL), which had more negative news and dropped 5 1/2 points today on 42 million shares.

Other losses included Transocean Ltd. (RIG), down 2.07 at 51.99, but BP Exploration plc (BP) managed to gain 12 cents at 36.88, about a point off its high.

Leading the way on the upside, Google Inc. (GOOG) was up 13.37 at 489.20. Amazon.com Inc. (AMZN) gained 4.14 at 123.65, and Goldman Sachs (GS) was up 3.00 even at 140.25. One of the stars of the day today was Ivanhoe Mines Ltd. (IVN), up 2.02 at 16.45.

Other point-plus gainers of note were California Pizza Kitchen Inc. (CPKI) up 1.32 at 16.04, China Automotive Systems Inc. (CAAS) up 1.20 at 18.40, and Dendreon Corp. (DNDN) up 1.28 at 33.73.

China TransInfo Technology Corp. (CTFO) was a stand out in the low-priced sector, up 1.46 at 7.19, with a big percentage gain. VIVUS Inc. (VVUS) was also a star today, up 1.79 at 12.44 on nearly 31 million. Valassis Communications Inc. (VCI) gained 1.84 to 31.84 today.

Among issues on the downside, the ultrashort ETFs had a very bad day today, with the Direxion Daily Small Cap Bear 3X Shares (TZA) dropping 3.57 to 34.21, Direxion Daily Emrg Mkts Bear 3X Shares (EDZ) down 1.55 to 39.77, and Direxion Daily Financial Bear 3X Shares (FAZ) dropping 1.04 to 13.74.

Stepping back and reviewing the hourly chart patterns, the indices had a 5-wave rally today, interrupted by consolidations in the morning and mid-day, and a late pullback as well, but for the most part the indices were up very nicely with confirming indicators today. The key to today’s action was late in the day the indices backed off from its major declining topsline, which could lead to further downside.

Harry Boxer is a technical consultant to many Wall Street hedge funds and large institutional traders, and author of TheTechTrader.com.