Technically the rally continued today, although we had a very strong gap down in the morning.  Fortunately, the indices held right there and did not have any follow-through to the downside. 

After some early bear flags failed they went higher.  The indices rallied back up to test yesterday's highs on the Nasdaq 100 and made slightly new 4-year highs on the S&P 500 today before backing off in the afternoon to retest the lows. After making higher lows they rallied in the last hour into the close, putting the indices back in the plus column.

The Dow was up a little less than 14, the S&P less than 1, and the Nasdaq 100 was barely up, 0.18.  The SOX Index was down nearly 2 points today and that pressured Nasdaq most of the day.

The technicals were negative on advance-declines by only 17 to 15 on New York and about 3 to 2 on Nasdaq.  Up/down volume, however, was just marginally negative by less than 1/2 million shares on New York on total volume of 1.5 billion. Nasdaq traded over 1.7 billion with about a 9 to 8 negative plurality.

TheTechTrader.com board was narrowly mixed with a couple outstanding issues on the plus side.  Netflix (NFLX) jumped 1.32 on 3.2 million shares and broke out above the recent trading range.  Forward Industries (FORD) hit a new all-time high today, reaching 29 before backing off into the close, closing at 28.28, up 1.08 on more than 1.4 million.  Dynamic Materials (BOOM) advanced 56 cents, although it was up about 1.30 higher earlier in the session.

On the downside, Georesources (GEOI) soared in the morning, reaching technical resistance, but backed off 2 1/2 points, closing down 91 cents on the day.  Able Energy (ABLE) reacted likewise, reaching as high as 18.30 before closing at 16.30, down 56 cents on the day.

Evergreen Solar (ESLR) gave back 36 cents and DayStar Technologies (DSTI) 31 cents in the alternative energy sector, but Energy Conversion Devices (ENER) made a new 4-year high over 27 1/2, before backing off and closing at 26.86, up 21 cents on the day.

Low-priced IPIX Corp. (IPIX), a new one we're watching, advanced 68 cents on 5 million shares, closing at the high for the day going away.

Stepping back and reviewing the hourly chart patterns, the rally continues.  Despite all the gyrations the indices have not violated their rising 40-day moving averages on either the S&P or Nasdaq 100 over the last four weeks and price support continues to hold on each pullback.  So, until that's broken the trend is your friend and the trend is still higher.

The Technical Trader is on vacation until Monday.  We'll talk to you again then.

Good trading!

Harry

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.