The markets had a strong session to start the week, especially on Nasdaq where Chinese stocks ruled the day. 

The day started out with a strong rally from the get-go that took the Nasdaq 100 to new 2006 highs.  The S&P 500 at no time today was able to follow through and confirm that, but it did rally  right up to resistance before backing and filling for most of the session.  After the strong morning rally, the indices drifted lower for several hours, tried to rally mid-afternoon but were unable to break through the highs and then backed off in the last hour or so, with the indices closing up on the day, but narrowly so on the blue chips. 

The Dow was up just 23.45 and the S&P 500 up 3 Ã,½.  The Nasdaq 100, however, was up nearly 17.  The Philadelphia Semiconductor Index (SOXX) was part of the reason, up 7.24, with the semiconductor very strong today.  The SMH advanced 63 cents.

The technicals were positive by just 17 to 16 on advance/declines in New York but nearly 3 to 2 on Nasdaq.  Up/down volume on New York was about 4 to 3 positive, with 1.4 billion traded on New York and more than 1 Ã,¾ billion traded on Nasdaq a better than 2 to 1 positive plurality on advancing volume over declining volume. 

TheTechTrader.com board  was very active and had some outstanding winners today, as indicated, particularly in the Chinese sector.  E-Future Information (EFUT) on top of its 5.60 gain on Friday gapped up at the opening, ran for most of the session with a mid-day consolidation, and closed extremely strong at 29.49, up 9.60, and is trading another point higher in the aftermarket.

Other Chinese stocks of note, Chindex (CHDX) gained 3.29, closing at 18.63 on nearly a half million shares after releasing strong earnings.   China Development (CTDC) was up 1.79 to 8.63.  China Medical (CMED) closed near unchanged today, but in the aftermarket after releasing earnings was up another 2 Ã,½ points to 30.40.China Automotive (CAAS) gained 3.15 today on heavy volume,

Fuel Tech (FTEK) advanced 1.17, ISIS Pharmaceuticals (ISIS) was up 2.05 on positive drug news, and recent Chart of the Week Flamel Technologies (FLML) hit a new high today, up 57 cents.  Energy Conversion Devices (ENER) was up 45 cents, and Angeion (ANGN) up 52 cents.

Stepping back and reviewing the hourly chart patterns, the S&P 500 now has four tops in the 1387-89 zone over the last couple weeks, and has been unable to break through, showing formidable resistance just under 1390, as the  Nasdaq 100 continues to make new highs.  Letââ,¬â"¢s see if the NDX and the tech sector can drag the S&P up through key resistance and extend the rally, or whether that ultimately becomes a negative divergence and they roll over.  Options expire on Friday, and it should be an interesting rest of the week.

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.