Strong move on mixed breadth

Stocks started strong with a gap up on the open and finished strong with a close near their highs for the day. Overall volume was not that strong and Net Advancing Volume was mixed. NYSE Net Advancing Volume ($NYUD) finished at +877, while Nasdaq Net Advancing Volume ($NAUD) finished at +1377. The Nasdaq number was impressive enough, but the NYSE number below +1000 was not impressive and gives cause for concern. On the other hand, NYSE Net Advances ($NYAD) finished above +2000 and Nasdaq Net Advances ($NAAD) finished above +1000. In contrast, NYSE Net Advances were impressive, but Nasdaq Net Advances were not impressive. It is a strange situation with a rather split market, meaning we could be moving into a high level trading range for the next few months. Here are two chart links: Nasdaq breadth and NYSE breadth.

With Tuesday's strong advance, SPY surged above short-term resistance and closed near 110. The breakout is positive with the next target around 111. Broken support and the early February high mark resistance here. In addition, a 62% retracement of the January-February decline would extend to around 111. I am also marking a momentum resistance zone around 50-60 for RSI. This is based on the premise that a downtrend started with the plunge below 40 in mid January. Notice that the 40-50 zone acted as momentum support during the uptrend. Things could get very interesting if/when SPY and RSI hit their respective resistance zones.

On the 60-minute chart, SPY broke through the 108 barrier with a gap and follow through. The gap zone around 108 becomes the first support area to watch. A strong breakout should hold and a move back below 108 would show uncertainty. Overall, the pink trendlines capture the five day uptrend with support at 106. A break below this level would fully reverse this uptrend.