Stocks managed to finish the week on an up-note on Friday. The majority of gains came in the first hour or so. The indices gapped up, tested resistance, backed and filled and then had a secondary rally which took them up to yesterday afternoon's rally highs on the Nasdaq 100 and just beneath them on the S&P. For the rest of the session Nasdaq vacillated sideways in a consolidation flag/pennant pattern, while the S&P looked like more of a rising flag formation.

Net on the day, the Dow was up 52, the S&P 500 7, the Nasdaq 100 nearly 16 and the Composite 17 1/3. All the indices closed very near their highs for the session.

The technicals were solid today, with advance-declines about 22 to 11 positive on New York and 22 to 10 on Nasdaq. Up/down volume was about 2 1/2 to 1 positive on New York, although total volume there was about 1.3 billion. Nasdaq was a little than 2 to 1 positive on total volume of over 2 billion.

It was a mixed picture on TheTechTrader.com board. The upside was led by China Automotive (CAAS), up 1, but even that was about 1.50 off the high. Zoltek (ZOLT) was up 37 cents, and in the low-priced sector it was an outstanding day today for Evergreen Solar (ESLR), up 44 cents on 3.2 million. The SMH was up 43 cents and the QQQQs up 36 cents.

On the losing side, Taser (TASR) was down 1.16 and Parlux Fragrances (PARL) backed off 57 cents from recent gains. Applied Digital (ADSX) was off 56 cents, Spatialight (HDTV) 38 cents closing below 5, Medicore (MDKI) 47 cents, and Nitromed (NTMD) 61 cents.

Stepping back and reviewing the overall patterns, the 2005 downtrend which began on the first trading session of the year technically is still intact. However, they did close right at the upper end of the down channels , right at the declining tops lines and moving averages on the hourly charts.

Today's session was encouraging, as ahead of the three-day weekend traders could have easily taken the indices down, but they didn't. Today saw a nice recovery off of yesterday's late losses, which held right at Wednesday's lows. So ,at this point we have a double bottom of sorts on both indices, a potential base pattern that could develop into a reversal if we can break out from here on Tuesday.

Tuesday could be a very key day to the short-term trend. Will they head south and continue the downtrend, or break through KEY short term resistance and snapback to test some additional upper levels of resistance,that's the question to be resolved.

Until the current downtrend is convincingly reversed, the trend is your friend and the trend is still down. The numbers I'll be watching if we do break out are the 1578-80 zone on the Nasdaq 100 and the 1195 area on the S&P.

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.