Wow – stocks absolutely flew out of the gate today, surpassing my expectations.  As noted yesterday, technology and small cap issues were where the gems were and even the financial laggards picked up some gains on the day.  Now before we go jumping for eternal joy, I’m going to have to bring this little party back down to reality just for a bit.  Now that we’ve broken out of some of the consolidation areas  we have been highlighting, resistance areas are beginning to show up.  Readings on the short term timeframe including the stochastic oscillator and also the mcclellan oscillator are getting overbought.  Armageddon? No. Take a few profits on long positions? Yes.

Let’s revisit the SPY chart which has the long term descending trendline still in place.  First the long term, then the 6 month:

Another thing that caught my eye is a potential Eve and Adam double top in the IWM.  Yes I know I have been pumping the small caps (and look at those suckers go!) but if they decide to reverse here, they could put in the double top pattern.  Eve and Adam comes from Bulkowski and it is named as such because the first top is rounded, like an Eve may be, and the second top is a spike, like an Adam might be.  You get the picture.  Take a look here:

It’s party time, but don’t get too drunk – lest we get a bad hangover.  Even still, I’m on the verge of becoming a bull only blog – so yes, we stand at a critical juncture in the markets.  Now watch the wheels come off this wagon tomorrow.