Time to Put Up or Shut Up

The market has gone about as far as it could possibly go if we are to continue to consider this latest upswing as a countertrend rally. Resistance levels were heavily tested on the NASDAQ yesterday and the S&P 500 has already broken through its downtrend line established from the beginning of January. What almost has to follow at this juncture is a hard reversal as the downtrend reasserts itself or a volume surge that pushes indices and stocks significantly higher. Overhead resistance on the S&P is still worrisome but strength in the tech sector is as promising as we have seen in quite some time. Momentum belongs to the bulls here and for the first time since last August we have a significant chance of enjoying a market breakout that could retest January’s highs. Proceed with care though since the balance is precarious here and could still tip either way.