Three consecutive accumulation days (see our equivolume chart) for the NASDAQ (and gains by the other major indexes) confirm that the bulls are back in control as earnings season brings some spectacular profit gains. A continued cheap money policy, for as far as the eye can see, from the Fed practically guarantees that the investment houses will continue to borrow cheaply and push up the price on equities. More confirmation that there is a strong upward bias is that the strength of the last three days comes in the face of increasing unemployment claims, lower than expected first quarter GDP and continued concerns over europe as the UK falls back into recession and austerity measures are clearly seen to be failing.

Our trend indicator for the S&P 500 turned up this week. That the index also moved through its 50 day average was coincidental as other factors determine the direction of the trend in our model. Although the NASDAQ saw three accumulation days, our trend signal for the NASDAQ remains down but we can expect the trend signal to change in a day or so if the upward move continues.

No new features this week.

We had hoped to have an update on our analysis of how to trade breakout pullbacks but ran out of time. In response to last week's report I received the following comment: "I did enjoy looking at your exploration of this trading concept!  It was Richard Wyckoff, I believe who first proposed to not buy the breakout, but rather wait for playing the retracement test back to the pivot of a breakout.  Wyckoff's first job was as a stock runner in 1888 as a 15 year old, and in 1908 he published the first technical analysis method of its kind.  I guess we can't say it is a new idea......"

Maybe old wine in new bottles but it looks promising so we will continue our work.