The indices had a very strong snapback rally off the recent pullback lows, and the day was particularly significant for the blue chips, which had an extremely strong session.

The day started out with an early move down, then a very strong snapback rally that took them to resistance.  They pulled back to retest successfully, then rallied for the rest of the morning, consolidated at lunch hour, and resumed the rally in the afternoon.  Only a last-hour pullback/consolidation brought them off the highs, but didn't do too much damage price-wise.

The Dow was up 136 today, and only 19 points off the high.  The S&P 500 was up 12.67 and just 3 points off its high.  The Nasdaq 100 gained more than 16 points to close about 5 points off its earlier high.  The SOX Index, which was down most of the day, managed to get back into the plus column, closing at 536 and change, more than 10 points off the low and up 3.66 on the day.

The technicals were positive both on advance-declines and up/down volume.   Advance-declines were more than 2 to 1 positive on New York and a little less than 2 to 1 on Nasdaq.  But the up/down volume was the story today, more than 2 1/2 to 1 positive on New York, with more than 1 3/4 billion traded.  Nasdaq traded a like amount and was also about 2 1/2 to 1 positive.

TheTechTrader.com board was very mixed, with a large amount of stocks fractionally changed.  Apple Computer (AAPL) led the way, up nearly 3 points today on more than 40 million shares.  Biotech stock Nastech (NSTK) was up 1.24.  Dynamic Materials Corp. (BOOM) snapped back 1.32, and Fuel Tech (FTEK) was up 1.01 today.

Other stocks of note, Rediff.com India (REDF) advanced 63 cents, Sify Ltd. (SIFY) 44 cents, Stereotaxis (STXS) up 40 cents, and DayStar Technologies (DSTI) up 54 cents, along with low-priced AVI Biopharma (AVII) up 49 cents on 3 1/3 million.

On the downside, Energy Conversion Devices (ENER) once again was down, off 1.72 and now some 15 points off its high of four weeks ago.  Also in the alternative energy sector, Evergreen Solar (ESLR) lost 77 cents.  But Distributed Energy Systems (DESC) was up 5 cents, and as indicated earlier DSTI was also up, so that group was mixed today.

Other losses of note, TradeStation (TRAD) gave back 70 cents and Viisage (VISG) 52 cents.  Broadcom (BRCM) got hammered for 1.78 and kept the SOX from making bigger gains today.  The SMH was up 50 cents, and Qs 41 cents.

Stepping back and reviewing the hourly chart patterns, the indices yesterday double-bottomed on the Nasdaq 100 and made higher lows on the S&P, and that led to today's rally.   They rallied steadily all session and held their intraday moving averages, but in the overall scope of things the Nasdaq 100 is still in a 4-week declining channel, as has the S&P 500, albeit a bit shallower.

But today's action brought them back above their 40-day moving averages on the hourly charts, which is positive.  Next targets to keep close tabs on would be the 1680-82 zone on the Nasdaq 100, which represents price and declining tops resistance, and the 1280 and then 1288 levels on the S&P 500, which represent the declining tops lines and previous rally highs.

So we'll be watching them carefully to see if we can get an extension of the rally tomorrow.

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.