It was another up-day as the indices extended the rally to three days in a row.  The indices closed at the highs for the day going away, with a strong, last 90-minute burst.

The day started out with a gap up.  They backed and filled, and held support twice in the morning.  That triggered a morning rally to new session and 2 week highs which took out key short term resistance at NDX 1680, which represented not only lateral price resistance but the five-week declining tops line.  The S&P did the same, breaking through its declining tops line of the last five weeks, as well.  So, technically we had a breakout today.

The NDX rolled over mid-afternoon and went to new session lows briefly, taking out an intraday triple bottom.  But that lasted about two minutes, and the S&P was far above the lows at that point in time.  That positive divergence caused the late rally.

Net on the day, the Dow was up nearly 62, the S&P 500 was up nearly 9 1/2, and the NDX 15 1/2. The SOX Index was up about 1 1/2 percent, or 7 3/4 points, and that really pushed Nasdaq today, particularly in the afternoon.

The technicals were strong by about 2 1/2 to 1 on advance-declines on New York and a little less than 2 to 1 on Nasdaq.  Up/down volume was very strong on New York with about 4 to 1 positive on more than 1.6 billion.  Nasdaq traded more than 1.83 billion with a little less than 2 to 1 positive on up/down volume.

TheTechTrader.com was very mixed today. Broadcom (BRCM) exploded for 2.54, and Parlux Fragrances (PARL) also closed up 2.54.  Apple Computer (AAPL) was up 1.35 and BioCryst Pharmaceuticals (BCRX) 1.36.  Energy Conversion Devices (ENER) came on strong late in the session, closing up 1.70, and Crypologic (CRYP) was up 1.07, with Rediff.com India (REDF) gaining 1.03 and Viisage (VISG) 1.13.

On the downside, PW Eagle (PWEI) came out with earnings , had a conference call, and Wall Street did not like what it saw & heard, as the stock got pounded for a 5 point loss on 2 1/3 million shares.  Zevex (ZVXI) got hammered in the last 45 min of the session & suffered a 2.42 loss today.  Pacific Ethanol (PEIX) gave back 1.24, and Open Wave (OPWV) was off 52 cents.

Stepping back and reviewing the hourly chart patterns, as indicated the rally continued today as an intraday test of support was successful and key five-week declining tops lines were taken out.  On the S&P the last two rally highs of January 19 and 30 were also taken out right near the close.  That augurs well for a continuation of the uptrend.

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.