The markets had a positive session on Thursday.  They started with a gap-up this morning, then tried to extend the early morning run, but pulled back very sharply. However, initial support held.  They rallied right back to the highs, actually took them out on the S&P 500 and Dow but the Nasdaq 100 (NDX) did not confirm.  Then they pulled back just before lunch hour and went into a very narrow, very quiet consolidation, which held above support at the intraday moving averages and trendlines.  They surged again in the afternoon, particularly late in the session, closing at the highs for the day going away, and at key short-term resistance.

The NDX managed to make it right to the 1600 level, closing right near the weekly high reached on Tuesday.  The S&P 500 did the same, closing at 1273 and change right at Wednesday's highs and near resistance from the end of last week's high.  So we're at key short-term resistance in what appears to be a bottoming process and potentially a head-and-shoulders bottom. However, one more pullback to retest support & form a right shoulder may be necessary.

Net on the day the Dow was up a little less than 93 points, the S&P 500 up 14 1/3, and the Nasdaq 100 19 1/2.  That despite the Philadelphia Semiconductor Index (SOXX) being down 2.05 today.

Advance-declines were very positive by more than 3 to 1 on New York and a little less than 3 to 1 on Nasdaq.  Up/down volume was 6 1/2 to 1 positive on New York with a total of just under 1.7 billion traded.  Nasdaq traded just under 2 billion and had a nearly 5 to 1 positive ratio on up/down volume.

So, it was a very strong day for the underlying technicals, certainly confirming the positive day, and the bulls followed through to yesterday's late afternoon rally.  That makes a gain of 45 points in just the last day and a half on the Nasdaq 100 and 28 points on the S&P 500 during that same time frame.

TheTechTrader.com board  was very active and mostly higher, except for one standout issue, Baidu.com (BIDU), which had a difficult session, losing 4.65 today on 2 million shares.

On the plus side, EBAY was up 3.68 on some positive news, and Apple Computer (AAPL) gained a point.   The Qs (QQQQ) advanced half a point.

Among other gainers, 51job, Inc.(JOBS) was up 1.55, Pacific Ethanol (PEIX) 1.29, DXP Enterprises (DXPE) 1.21, and Dynamic Materials Corp. (BOOM) 1.01. 

Sierra Wireless (SWIR) advanced 89 cents, Rediff.com India (REDF) 55 cents, MGP Ingredients (MGPI) 91 cents, LMI Aerospace (LMIA) 42 cents, and Fuel Tech (FTEK) 35 cents.

Stepping back and reviewing the hourly chart patterns, as indicated earlier a short-term bottom may be forming, and the indices will either have to break out tomorrow and take out resistance, or back off.  If they do back off, I'll be looking at the 1580-83 zone on the NDX and 1261-62 zone on the S&P as support. 

If those levels are violated, 1570 NDX and 1253-54 SPX would be secondary support.

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.