We are still patiently waiting to see if this new rally can hold. When looking at a chart of the S&P 500 or the Dow Jones Industrial Average it's hard not to be bullish right now, but unfortunately, the Russell 2000 and technology charts (NASDAQ Composite, NASDAQ 100, and Semiconductor Index) are far from confirming that the bottom has indeed been reached.

The first chart shows the S&P 500. This index looks the most healthy. You can notice how today's high hit the downtrend line we have been mentioning in commentaries (blue line). It has also managed to not only stay above its 50 day moving average, but it broke above its 200 day yesterday. This is very positive. A break above the downtrend line and the horizontal resistance at 1280 should at least push the index to the 61.8% Fibonacci retracement from the May high and horizontal support at 1290. You can also see how the 50% Fibonacci retracement is coinciding with the downtrend line resistance. A break of 1290 will nearly guarantee a push to 2006 highs and beyond. This week's action has been very bullish and healthy.

The next chart is of the Dow Jones Industrial Average. You can see how the index has formed a double bottom formation. A break above the downtrend line, followed by a break of the 61.8% Fibonacci retracement (11,300 area) should push the index above the May high.

The next two charts do not look as attractive. The Russell 2000 is still in the lower end of its trend channel and sitting below both its 50 and 200 day moving averages. The Fibonacci retracements line up very well on this chart as well. The Russell needs to break above the moving averages, downtrend line, and the horizontal resistance at both the 50% and 61.8% retracement areas for us to know for sure that the bottom is in.

The final chart is the ugliest. It is the chart of the NASDAQ Composite. On a short-term level, the action has been very positive this week. The double bottom has been formed. A break of the horizontal resistance at 2090 would be very healthy. We could easily see a move to the 2150 area if this happens. Resistance is also at 2200 and eventually 2240. A break of 2240 would lead us to believe that the bottom is definitely in.

It is unfortunate that the usual market leaders, technology and small-caps, have been lagging. Regardless, the charts of the S&P 500 and Dow Jones Industrial Average look very healthy. Even though we mentioned that the 2240 area would need to be seen in the NASDAQ Composite to know for sure that the bottom is in, confirmation from the S&P 500 and Dow (which would definitely happen by that point) quite possibly would suggest that the lagging indices will soon follow suit. Therefore, in the short-term, our eyes are on the action in the S&P 500 and Dow Jones Industrial Average.