The indices we follow continue to be in a consolidation period. We believe that the pullback is near over, if not already completed, and we will see a break to new highs in the coming weeks.

The NASDAQ Composite needs to have a sustained break above the 2580 level before we can assume that the pullback is over. Additional resistance is at the 2600 and 2625 area. A possible head and shoulder formation is still being formed in this index. A break of 2680 will be a strong step in invalidating the pattern.

With the 50 day moving average continuing to push higher, it is likely that the S&P 500 has already bottomed. Also, the index fell into our 1490 support line last week before increasing. As long as the 1490 support is held, the next move should be to the 1530-1540 area. A downside break of 1490 will likely push the S&P 500 to 1460.

The Russell 2000 broke below its 50 day moving average yesterday and pushed back above it today. This is a strong sign of strength. Also, the 830 resistance area is in the process of being broken. A break above 845 is needed to invalidate the possible head and shoulder formation and start the push above all-time highs.

The indices have likely ended their recent pullbacks. With the 50 day moving averages steadily increasing, it is only a matter of days or weeks before the market moves above 2007 highs.