Stocks rose for the third consecutive day on Tuesday. And the Nasdaq led the other indices with the highest percentage gain as it did in each of the previous advances.

Volume on the NYSE picked up, but is still just a fraction of the downside volume that drove stocks into last summer’s trading ranges. The NYSE traded just over 1 billion shares and the Nasdaq traded 541 million. Advancers were ahead of decliners by 1.9-to-1 on the Big Board, but on the Nasdaq, advancers barely beat out decliners.

By closing above Monday’s high, the major indices confirmed a breakout from the consolidation triangle that has dominated trading for almost all of August. Yesterday’s break was impressive despite the relatively low volume. Stocks fought off an early round of selling that resulted from a disappointing August Consumer Confidence Index number and the minutes from the FOMC meeting that indicated that members were in disagreement on what to do about a lagging economy.

And so bad news was ignored and stocks forged ahead — a very positive development for the bulls. This is especially significant when stocks move out of a potentially bearish formation like the August consolidation.

The Nasdaq looked especially strong yesterday, as it rose despite some last-minute selling, and confirmed Monday’s gap and break through its 20-day moving average (green line). Also note that its stochastic indicator still has some room before becoming overbought.

Despite the week’s impressive advance, the bulls are probably going to find further advances more difficult as the indices approach their respective neckline break points. The Nasdaq’s neckline is at 2,600. Note that the market’s top extends from December 2010 through July with the midpoint for the Nasdaq just above its 200-day moving average at about 2,700. This is formidable overhead, which will probably take the remainder of this year to resolve.

Today’s Trading Landscape

To see a list of the companies reporting earnings today, click here.

For a list of this week’s economic reports due out, click here.

• See Serge Berger’s Daily Market Outlook: Bulls Not Being Put Out to Pasture Yet
• See Sam Collins’ Trade of the Day: Your Next Stock to Sell: Sony
• See Serge Berger’s Trade of the Day: A Rare Pick for an Overbought Market