The markets had a volatile morning, pulled back early afternoon and then rallied very sharply at the end of the day, taking out overhead resistance and perhaps completing a basing pattern on the Nasdaq 100 that's been developing over the last 3 days. The S&P 500 also broke out, movng up nearly 25 points just in the last 90 minutes but trails the NDX at this point.

Net on the day the Dow was up 152.25, the S&P 500 up 21.39, and the Nasdaq 100 44.35. The Philadelphia Semiconductor Index (SOXX) gained 3.17.

Technicals moved sharply into the plus column after being negative earlier today, with advance-declines positive by 21 1/2 to 10 on New York and by 20 1/2 to 8 1/2 on Nasdaq. Up/down volume swung even more sharply to the plus side, closing 13 to 4 positive on New York on total volume of nearly 1 3/4 billion. Nasdaq traded 2 1/2 billion and had a 3 to 1 positive ratio.

TheTechTrader.com board, as a result, was mostly higher. There were many point-plus gainers today. Shippers were strong. Leading the way was DryShips (DRYS) up 3.13, Excel Maritime (EXM) 2.02, and TBS International (TBSI) up 1.09.

Chinese steel company and recent Chart of the Week General Steel (GSI), up 1.64 to 12.79, had an excellent session. Energy Conversion Devices (ENER) was up 1.52, and although Canadian Solar (CSIQ) was down 33 cents on the day it was 3.75 off a sharply lower earlier price. So a big comeback there.

A-Power Energy (APWR) at 22.89 was up 1.81. With the price of oil dropping, the DUG advanced 78 cents and the DTO 1.95. Both are oil and oil & gas short instruments.

On the downside, oil stocks obviously took it on the chin, with the US Oil Fund (USO) dropping 4.83. Pyramid Oil (PDO), which has now last 2/3 of its value in the last couple weeks, fell 3.62 to 14.43, and Royale Energy (ROYL) at 8.11 was down 1.18.

Mexco Energy (MXC) continued to get pounded, now 30 points off its recent high in just two weeks, falling 2.77 on the day.

Other losses of note, AgFeed Industries (FEED) continued much weaker than the rest of the market, down 75 cents to 10.95, although it traded as low as 10 earlier in the day.

The SDS short instrument, with the rally in the market, got hammered for 2.55. The QID fell 1.70 as would be expected.

Stepping back and reviewing the hourly chart patterns, the indices finally put on a decent rally in the afternoon and broke out across the short-term declining tops lines on the S&P 500 and the Nasdaq 100. They now have overhead resistance to contend with on the NDX at around the 1875 area, closing about 6 points off that level.

The S&P 500 closed right at yesterday's highs near 1274, and will have a much more difficult time making further progress, as overhead exists at the 1280-85 zone and then north of the 1290-92 zone.

Good trading!

Harry