The stock market indices staged a very strong rally in the morning when they gapped up strongly, formed bull flags, ran hard mid-morning, flagged again near midday, and then spiked up to the highs for the day near 1860 on the Nasdaq 100 and 1100 on the S&P 500. An afternoon rollover occurred in a 5-wave decline that closed them at the afternoon lows going away.

Net on the day, the Dow closed up 103.84 at 10,405.85, though that was 75 points off its earlier high. The S&P 500 was up 13.16 at 1092.54, closing about 7 1/2 points off its high. The Nasdaq 100 was up 23.86 at 1845.37, 15 points off its high.

Advance/declines, however, were nearly 4 to 1 positive, with 2400 up and 640 down on the New York Stock Exchange. Up/down volume was about 5 to 1 positive, with quite light volume of 975 million shares traded today. Nasdaq traded about 1 3/4 billion shares, and had a 4 to 1 positive ratio. Advance/declines were about 3 to 1 positive.

Overall, it was a bullish day today, and that was reflected on the TheTechTrader.com board, which had a stellar session. Leading the way today was Apple Inc. (AAPL) up 4.33 at 251.97, Google Inc. (GOOG) up 4.93 at 490.52, and Amazon.com Inc. (AMZN) 2.79 at 128.86.

Other point-plus gainers included a very strong percentage move for The LGL Group, Inc. (LGL) up 3.46 at 15.96. China Agritech Inc. (CAGC) closed up 1.62 at 16.90, Cree Inc. (CREE) 1.71 at 58.31, Acme Packet, Inc. (APKT) 1.22 at 32.28, Pactiv Corp. (PTV) 1.66 at 32.58 on a takeover bid, and Westport Innovations Inc. (WPRT) 1.13 at 18.66.

On the downside, the ultra-short ETFs, obviously, got hammered, with the Direxion Daily Small Cap Bear 3X Shares (TZA) down 1.90 at 34.81, and the Direxion Daily Emrg Mkts Bear 3X Shares (EDZ) 1.18 at 34.80.

Stepping back and reviewing the hourly chart patterns, the indices had a very strong 5-wave rally today starting with a big gap up, but reached their rally highs near overhead resistance at midday and then backed off in a 5-wave decline to close at the afternoon lows.

Still, it was a pretty good session as a follow-up to yesterday. Today was a significant day with the indices moving back over key initial resistance and moving averages on the hourly charts, but secondary resistance proved to be more formidable, and they backed off in the afternoon.

We’ll see what happens tomorrow and whether the bulls can take control in what is a key point in the trend for the indices.

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