Editor’s note: Serge Berger, the head trader and investment strategist for The Steady Trader, will be providing the Daily Market Outlook until Sam Collins returns on July 25.

I will start today’s morning missive where I left off yesterday, with the U.S. dollar index chart. Yesterday’s drop in the dollar broke that narrowing trading range I’ve pointed out so many times in recent weeks, and as such, now also broke the series of higher lows. This chart break bodes well for stocks in the near-term as the inverse relationship of the dollar and stocks remains intact — until it doesn’t.      

Overall, U.S.stocks closed firmly higher Thursday, and right near their session highs. Morgan Stanley (NYSE:MS) reported strong earnings and gave the financial sector that desperately needed lift.

European Union (EU) leaders are close to an agreement to broaden their financial aid package forGreece, which only helped stocks bid even higher. In my humble opinion, this “solution” doesn’t resolve much but does push the European debt problem abyss a little further into the future and, hence, should be a plus for stocks near term. 

Energy and financials both led the tape higher, which I pointed to in yesterday Daily Market Outlook as the key for a further rally in stocks.

While many bank stocks and indices look much prettier now, the chart of Wells Fargo (NYSE: WFC) is a wonderful specimen.    

The energy sector also looks nice, and I would like to point out the chart of the Oil Services HOLDRs (AMEX:OIH) as the example.

And this brings me to the technology sector, which is very close to breaking to new multiyear highs if we look at the five-year weekly chart of the Nasdaq 100 index. Stocks like Cisco Systems (NASDAQ:CSCO) moved solidly higher in a healthy fashion. 

If we look at the technology sector closer up on a daily chart of the Technology Select Sector SPDR (NYSE:XLK) spanning back to January 2011, we see how coiled up the sector is to potentially break higher through the resistance line in blue. Also important is that the sector did not retrace more than 50% of the late June/early July rally before now making another attempt to break through this resistance zone.

After the consolidation day on Wednesday, yesterday’s rally in stocks favors higher levels still over the next few weeks, and might just hit our target level of 1,370 on the S&P 500.

For one stock that is looking to break resistance, see the Trade of the Day.

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.