There's the possibility of month-end (and quarter-end) marking up (window dressing) tomorrow. That could make for an interesting session given the holiday-like volume we'll probably have.

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It's been a long time since I posted any index charts with Guppy Multiple Moving Averages (MMAs). The MMAs on the indices show bullish long-term groups (investors) providing support to a selloff attempt by the short term groups (traders). Here's the S&P 500's MMA chart.

The MMAs on the Russell 2000 and Nasdaq look even stronger than the S&P's. Those charts make it easier for me to believe that the market has some hope of holding up.

Here are the S&P and Nasdaq with the more typical 50 and 200-day moving averages.

Everything is up for the first time since December 2007 (I think).

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Back in April I linked to Dr. Duru's post about the rare technical sighting of T2108 above 90. I pointed out then (as I always do) that I don't like to use T2108 for tops. In the past I've found it to work much better at bottoms than tops (it worked well at the January top though). I guess it takes longer for people to snap out of a greed phase and to allow a top to form. The S&P 500 rose another 10% since it first cracked 90 and even now is still up about 4%. So I'm not sure what's the best use of T2108 at tops. Perhaps it could be implemented as some kind of early warning of froth.

What's of interest to me now is how close T2108 is getting to 20, which has been an important bottom signal. That signal worked like a charm for years but fell apart, like so many other indicators did, in last years market massacre. I'll be keeping a close eye on it over the next week or so.

Here are the index charts.

Some downgrades today.

Research In Motion Limited (RIMM) is all over the news tonight after reporting earnings. It traded down near its 50-day moving average immediately after the report buy bounced back during the conference call. Technically, I like the bear case on it since it broke that April trendline. But I wouldn't want to initiate a short position with it being so short-term oversold. A weak bounce back near that broken trendline could be a gift for the bears.

No changes.

Yesterday the S&P 500 broke its March trendline and today the Nasdaq followed suit. Other than that it still looks in pretty good shape. It's got room to pullback without threatening its 50 & 200-day moving averages.

I was asked about First Solar, Inc. (FSLR) earlier today. It looks like it just broke down from a descending triangle. I think it's in serious danger of filling that late April gap.

No changes.

I'm finally flipping the short-term trends to down since the indices all closed below their 10 DMAs. Despite that, in the short term I still see this market as sideways until the indices break the June lows.

As a general rule I used to tell people that they'd need an absolute minimum of $50,000 but $100,000 is probably more realistic. But years ago, after reading Dr. Brett's thoughts on the matter (which he's based on working with so many traders) I modified my response to add that "Dr. Brett recommends over $200K". You'll see comments by Michelle B (remember her?) on Dr. Brett's posts. Her comments match my thoughts on the matter almost exactly for a very specific situation -- a true daytrader, who doesn't take overnight risk and is willing to max out on 4x leverage. (If you're trading with a prop firm you may get 10x leverage, so the numbers could be adjusted accordingly.) If you're holding overnight you just can't be as aggressive with leverage and thus your capital requirements will need to increase.

Obviously people will have to analyze their own situations and come up with a number for themselves. Dr. Brett provided some links to some Monte Carlo simulation tools which are invaluable for doing that kind of analysis. As with so many things, one's own mileage will vary. One's risk of ruin should decrease with more capital and it will also be easier to make the amount of money necessary to make a living.

So back to the sideways action -- since the June 1st close the S&P is down 0.39%, the Russell is up 0.45% and the Nasdaq is 1.33%. But at the lows of the day all three indices were down since the 1st. So we've made very little progress in the last seven sessions. But what has been accomplished is working off the market's short-term overbought condition. The bulls should be feeling pretty good that sellers couldn't knock the market down from what should have been a vulnerable position.

If the Nasdaq breaks down from its June channel look for the May highs and/or the March trendline for support.

915 - 925 should be pretty good support for the S&P 500. The 20 and 200-day moving averages are near the bottom of that range and the March trendline and the June lows are near the top. It's hard for me to imagine this sideways range staying intact much longer. The path of least resistance seems to be up but I guess we need some catalyst to pop out of the range.

The Russell is also showing a clear sideways range over the last seven sessions. Gotta respect the range until it's broken. Depending on one's style that may mean trade the extremes, hold whatever positions you already have or just stay out.

No changes...

The S&P 500 actually lost a little ground since Monday's close but it's still holding on to the bulk of Monday's gains. Volume was below average all week, which makes me a little skeptical about the index's ability to stay above the May highs. For now it seems to be trapped between the May high and the January intraday high of 944. Sellers are trying hard to defend that January high and a strong move through 944 could create a nice squeeze.

The Nasdaq was able to build on Monday's rally and walked the upper Bollinger band to higher highs throughout the week.

The small caps were also able to make higher highs later in the week. It's short-term overbought so I wouldn't be looking to initiate positions here but instead at one of the support lines in the chart.

I'm still hesitant to flip the S&P's long-term trend to up. If it can move another 1% above the 200 DMA I'll do it.

Compared to the S&P 500 the Nasdaq has more air between it and its support levels. But it managed to hang tough today and closed near its high of the day after a late surge. It, like the S&P, is short-term overbought but that doesn't mean that it will pullback. It could stay overbought for a while or simply work off that overbought condition by going sideways for several days. Absent some news more sideways action for the market wouldn't surprise me ahead of Friday's payroll report.

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Unlike much of this run from the March lows, financials lagged big-time today. The BKX was actually down on the day and the XLF was only up 1% vs. 2.6% for the S&P 500. That could be nothing more than rotation but it's worth keeping an eye on. I was surprised at the number of shooting stars & candlesticks with somewhat long upper shadows (wicks) that I saw in my scans tonight. It wasn't a huge number -- 154 of my 995 stock universe -- but on a day in which the indices closed so near their highs of the day I wasn't expecting to see that. That made me look at the scan results on StockCharts.com and there are some interesting developments there as well.

There were 943 U.S. stocks that moved above their upper Bollinger Band today. That's obviously a sign of strength but it could also be a sign of mania. I don't use CCI or Parabolic SAR, but there were a lot of buy signals for those indicators today. That's got to be promising for the folks who do use those indicators. Back on the bearish side, for such a strong day there were a good number of "Filled Black Candles", "P&F Triple Top Alerts" and "P&F Ascending Triple Top Alerts". So I guess there's something for everybody today.

On to the charts... The Nasdaq is showing a nice breakout from about 5 weeks of backing & filling. It looks like we'll get (late, as always) confirmation of its recent strength soon by a Golden Cross of its 50 and 200-day moving averages.

The S&P broke out of its May range and above the 200 DMA but hasn't yet made a convincing move above its January highs.

Ditto for the Russell 2000.

The banking sector has really flat-lined for the last three weeks or so. The BKX is still up more than 100% off of its March lows, so perhaps this is just a deserved and needed rest.

I could flip all the long-term trends to up now but I'm gonna hold off on the S&P and Russell until they get a little more distance between then and their 200-day moving averages.

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The Nasdaq climbed back above its 200-day moving average and the S&P's 200 is coming into reach -- mainly because it's dropping so fast. It's only 24 points away, so a touch is practically inevitable.

Upgrades to all the short-term trends today...

The Nasdaq has a similar moving average situation forming, although it seems content to just ride the 200 DMA.

More downgrades to short-term trends today...