The oil services index (^OSX) has violated the upward trend line with its recent lows.

The larger cap stocks that are found in the Nasdaq 100 index (^NDX) still have to make a little further progress to join the broader index at a new multi-year high, and this serves to underline one of the most telling characteristics of the current market which is the ongoing outperformance by the smaller- and medium-cap stocks.

The Nasdaq 100 (^NDX) ended Friday's session with a tiny inside day candlestick that left the index just above the 1820 level. The small stranded island of prices registered in mid-January could be rescued this week if the index can decisively move beyond the 1760-1820 channel that has been in place since mid-November.

The breakout implications in the banking sector (^BKX) have been reinforced with the price action over the last three sessions, but yesterday's small Doji candlestick may be pointing to near-term directional uncertainty.

The pattern that has persisted for many weeks in the price development for the S&P 500, a periodic testing of the 20-day EMA followed by renewed strength, suggests that institutions are still seeing weakness as an opportunity to augment their portfolios.

Clive Corcoran writes that there is a lot of churning taking place in the broad market and that many trading desks are preoccupied with statistical arbitrage strategies between the larger cap indices.

The Nasdaq 100 index closed below its 50-day EMA, although an upward trend line through recent lows still appears to be intact.

Looking at the chart pattern for the S&P 500, Clive Corcoran suspects that 1430 is waiting to be tested next with a possible visit to the 50-day EMA at 1420. Depending on how these tests are resolved, we will be better able to determine whether Friday's reversal, although technically interesting, has longer-term consequences for the market.

Clive Corcoran believes the stock market will be attracted to the previous historic high from 2000, but we should expect to see increased volatility and nervousness at that level.

The S&P Midcap index (^MID) continues to show relative strength as the ascent pattern is becoming parabolic. The index is revealing more momentum than even the strong showing from the the small cap index, the Russell 2000 (^RUT).