I know when my real time watchlist is a sea of green and the prices are flickering rapidly it’s a big day with volume.  However, it wasn’t until I took a look at the chart of the Nasdaq over the past year and a half that I realized how big the move was.  You have to back to the big rally of August ’04 to see the kind of price/volume move made today in the Nasdaq.  It’s certainly the kind of move that can propel the market past the next level of resistance and set up a showdown at multi year highs. 

While today’s move was big, the Nasdaq still faces an important test before making a run at multi year highs.  The downward trend line – an area it had been unable to clear on two previous occasions.  However, just as resistance at the 200 day moving average, 2100 and the 50 day moving average have proven insignificant, I believe the Nasdaq will have no trouble clearing this resistance level in time.  It may happen tomorrow, it may happen in two weeks.  But it will happen.

The S&P has shoved resistance levels aside as buy volume picks up substantially.  In addition, the market has been getting stronger as the trading day goes on and closing near the high.  All signs of a very healthy market.  The S&P may also face some resistance at the downward trend line.

..last and certainly least are the dogs of the Dow, which continue to lag its smaller, faster growing brethren.  I still hear people talking about a big blue chip rally, just as they have for the past few years.  I suppose if they just keep talking about it, they will eventually be right!!  How much money has Microsoft made you in the last 5 years?  Answer: zero, zilch.  Maybe the avalanche of new products can make their shareholders a little money in the next year.. we shall see. How about for IBM over the last 6 years?  You’re down about 40% and haven’t made a dime during the bull market that began in ’03. Wow!   Anyway, you can see the dismal Dow, where the 50 day conintues to lag under the 200 day moving average and strong resistance remains at 10,500.  On Monday the Dow closed in the lower half of the trading range and today, it lagged the Nasdaq and S&P significantly with much lighter volume.