At this point we can safely say that last Monday was the bottom of the recent pullback and that a new uptrend has started. After running our long-term system tonight we are extremely far from being overbought. This suggests that the market will be moving higher for the next several months.

On the first chart of the NASDAQ Composite you can see the recent cup pattern that was formed over the past four weeks. We look at today's move as a breakout of that formation and as the height of the formation was 125 (2825-2700) we can assume that the next move will be to the 2950 area (2825+125). That would be about a 3% increase from here. Only a short-term pullback (probably to the recent breakout area of 2825) should occur at that point.

The S&P 500 stopped just below strong resistance today. We have added Fibonacci retracements on the chart to show how the recent move has broken above the 61.8% retracement level. This is a confirmation that the recent strength is indeed a new uptrend. The next stop should be 2007 highs, before a push to all-time highs.

The Russell 2000 has made a nice comeback so far, but is still the furthest from 2007 highs. We believe the index will push to the 850-855 area before a pullback.

Today's strength was additional confirmation that the uptrend is intact. Over the next several months we believe the indices will be pushing much higher.