Not surprisingly, the stock market has continued to move higher after last week's outside day. The NASDAQ Composite is leading the S&P 500 and Russell 2000 as it continues to break above 2007 highs.

On Tuesday the NASDAQ Composite broke above its recent cup formation. This clearly confirms that we have started a new uptrend. We have used a blue line to indicate the current trend. A sustained break of this line will likely trigger the beginning of a short-term pullback.

The S&P 500 has increased quite a bit since our last commentary, but is still about 1.5% off of all-time highs. The next significant resistance is in the 1540 area. Before the index can push to that area, it will have to break the micro-term resistance at 1527 and 1531.

The Russell 2000 is right below powerful resistance in the 850 area. A break of this area should trigger about a thirty point move in the index. This analysis comes from the fact that the Russell 2000 is in a double bottom formation and the measure rule suggests that the breakout will be the same height as the two cup formations. The formation has been formed from 820 to 850 (30 points) so the breakout should bring the index to 850+30, 880.

The stock market has clearly started another uptrend.