The indices we follow are just below recent highs. It is likely that we have already ended the short-term pullback that began at the end of last week.

The NASDAQ Composite is right below powerful resistance. It is possible that a head and shoulder pattern is forming. May 7 would have formed the first shoulder, May 23 the head, and today's high would form the second shoulder. A sustained break of the 2580 area would invalidate the formation. If the pattern becomes true, we can expect a break below our support line and a fall to the 2480 area. Otherwise, the break of 2580 should bring us to the high on May 23, before a further push higher.

The S&P 500 has not been able to have a clear break above all-time resistance. Currently, we are about a percent off of all-time highs. If this short-term pullback is indeed over, we could expect a break of all-time highs very soon.

The Russell 2000 is looking very healthy. It has managed to stay above its 50 day moving average and is very close to all-time highs. A sustained break of 845 would suggest that the pullback has ended and a new uptrend has emerged.

Most likely the stock market is about to begin another leg higher. Like all consolidations, the recent pullback will allow for further strength in the weeks ahead without the market becoming too overbought.