Gains Push Into Breakdown Gap

While today's gains were modest they were significant in generating clean pushes inside last week's breakdown gaps. This brings indices back to challenge 'bull traps'

The S&P experienced lighter volume trading as On-Balance-Volume moved to a 'buy' trigger. Today's action opens up for a challenge of 2,405, although shorts may see this as opportunity to go aggressive with a tight stop once markets makes all-time highs.

The Nasdaq is also approaching its 'bull trap'. On-Balance-Volume holds to its accumulation trend while the MACD is on a 'sell' trigger. As with the S&P the Nasdaq could see a challenge on the 'bull trap' tomorrow.

The Russell 2000 had the best of the day's action, but it only took the index back to its 50-day MA. Technicals are all in the red, but the risk:reward for the index remains poor particularly with the index stuck inside the 6-month trading range - a push back to 1,390 might make this a better short play.

The Nasdaq 100 looks like it will be challenging the doji with a high of 5,724 tomorrow. However, if this breaks above 5,724 then next up will resistance of the 6-month rising channel (blue hashed line).

Markets might squeeze another day of gains before profit takers and shorts pay a visit. If there are more gains then a parabolic move higher could emerge if all-time highs are breached.