Another relentless rally took place today, despite the fact that the futures were sharply lower before the opening and the market opened sharply lower.  But the morning drop on the Nasdaq 100 was pretty much it, although the S&P did make lower lows.  The SOX Index, which opened miserably due to Intel (INTC) and some of the other semiconductors stocks opening sharply lower, turned around and led the market higher for most of the day.

All the indices had an impressive three-step rally today that saw a morning rally to equal yesterday's high on the Nasdaq 100 but not so on the S&P.  Then there was a pullback, which looked real bullish in a flagging formation, followed by a spike-up right as lunch ended, and then a strong rally with another flag in between.  Even though there was a mid-afternoon session pullback, the indices recovered nicely and surged into the close. Only a last 5-minute pullback took them off the highs for the day.

Net on the day the Dow closed more than 100 points off its low, up 42 1/2.  The S&P was about 12 points off its low, up nearly 6 today.  The Nasdaq 100 was about 24 points off its low, up 12 today.  And the SOX was up 8 today, but about 17 points off its low.

So, a complete reversal from the morning gap-down and early weakness, which held the moving averages on my 60-minutes charts, an indication that they may be going higher.

The technicals were solid and confirmed the rally by 22 1/2 to 10 on New York and about 2 to 1 on Nasdaq.  Up/down volume was also 2 to 1 on New York and a little less than 2 to 1 on Nasdaq.  Volume was heavy on Nasdaq, with more than 1.925 billion traded, and New York traded more than 1.5 billion.

TheTechTrader.com board was very active today.  Several stocks had wild swings.  Host America (CAFE), in particular, plunged in the morning, went sideways for most of the mid-day session, had a very strong rally that took them up just underneath yesterday morning's highs, and then rolled over and got hammered backed 3 points.  Net on the day it was down more than a point on 25 million shares today, a big reversal there.

On the plus side, Energy Conversion Devices (ENER) rallied solidly back over 24, up 1.02 today.  Forward Industries (FORD) rallied into the close, closing at the highs for the day, up more than a point. 

Dynamic Materials (BOOM) was up 90 cents, Vertex Pharmaceuticals (VRTX) up 90 cents, and Amylin Pharmaceuticals (AMLN) up 44 cents today.

On the downside, Juniper Networks (JNPR) down 1.53 and Intel (INTC) 1.27 led the losses in the high-tech sector, but despite those losses the indices managed to recover.

Stepping back and reviewing the hourly chart patterns, the Nasdaq rally undauntedly has still not broken its 21-day moving average on the hourly charts, tested it this morning and rallied strongly off it.  The S&P 500 tested its moving averages this morning, dipped slightly below them before rallying sharply and taking out the rally highs as well.

Momentum still remains strong.  I don't know where this rally is going to end, but it's certainly defying some of the negative divergences and technical sell signals that currently exist, including the VIX moving under 10 for the first time in more than 10 years and the VXN moving to all-time lows today.

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.