In a holiday-shortened week, the key indices broke through major resistance. But can they hold onto the gains?

Light volume and a lack of solid breadth throughout the rally don’t necessarily support a move higher. But technically, regardless of the unconventional nature of the move, the trend is always considered first, and right now it is up.

The S&P 500’s big technical break came on Thursday, with its drive through the stubborn 1,332 mark. And the Nasdaq’s unique reversal from under its 50-day moving average (blue line) on a huge opening gap on Wednesday set the stage for a break of its resistance at 2,802.

Open gaps like the big black hole that opened on the Nasdaq chart on Wednesday are often like magnets that can pull prices back down into the gap, leading to sharp corrections. If that happens, then there is plenty of support for both the Nasdaq and the S&P 500. The S&P’s first support is at 1,320 to 1,332, and the Nasdaq’s is at 2,760 to 2,802.

Although the break above key resistance numbers has pierced through some important resistance lines, the nature of the move is suspect. Stocks could push to new highs, but the gaps and low volume suggest that the market is due for a consolidation before launching an attack that would lead to a high-volume breakout of major proportions.

For a stock breaking to new highs, 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.

If you have questions or comments for Sam Collins, please e-mail him at samailc@cox.net.