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The Indices had an important technical week last week, following through to the VERY strong upside reversal that occurred on Friday, January 6th. The Nasdaq 100 was higher all 5 sessions and closed the week at the highs going away, aided by strong performances from large-cap components AAPL, AMZN, MSFT, NVDA, NFLX, and TSLA. That index gained nearly 500 points for the week! The S&P 500 also followed through nicely and managed to close near 4,000, gaining about 100 points for the week.

Advance/Decline ratios were quite positive and confirm the trends. Now the indices have overhead objectives near resistance to deal with at NDX 11,800 and 12,100 levels. The SPX resistance appears to be at 4,050-53 and near 4,100.

The 13-14-month declining tops lines lie just ahead and are important levels to take out if this market has designs on much higher levels. However, for now, many underlying indicators, including the McClellan Oscillator percent of stocks over their 40-day moving averages and the VIX volatility index, are short-term overbought and/or near key overhead historical resistance levels.

The KEY to action going forward is the interpretation of whether or not the conditions are a result of an initial thrust that starts a new intermediate uptrend or just another rally back to resistance in a bearish overall downtrend. We should be getting answers to that question in the next days and weeks. The near-term action going forward may tell the tale of where this market wants to go.

The markets appear to be at a crossroads here, so pay close attention to what is revealed this week.

Remember: " Trade what you see, not what your think".

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