All three of the indices we follow are extremely close to 2007 highs. The market advanced at the end of last week and has been in a tight consolidation ever since. Soon, the indices will be breaking above their 2007 highs.

The NASDAQ Composite invalidated its possible head and shoulder formation with last Friday's advance. Since then, the index has pulled back slightly and looks to be in another consolidation pattern before another push higher. Support is at the 2600 level and it is likely that the index will not break below this area. A break of 2635 should launch a strong advance.

The S&P 500 is also in the middle of a small, short-term pullback. Support in this index is right above the 1510 area and the increasing 50 day moving average. A downward break of 1510 suggests a possible move to 1490. At this point we believe that the index is just consolidating and by next week should be at new 2007 highs.

The Russell 2000 has also invalidated its possible head and shoulder formation. The index is right above its main support at the 840 level. A break of this area would likely bring the index to the 50 day moving average and the 830 horizontal support.

The stock market continues to have low volatility and sitting through these consolidations can be frustrating. We believe that once the recent highs are broken the indices we start another strong leg forward.