Can't see the Forest for the Trees!? I've been intermediately bullish on the market for some weeks now but also feel responsibility to say when there's technical 'confirmation' of a new up leg in the 'LEAD' indexes, namely the S&P 500 (SPX) and the Nasdaq Composite (COMP). Since SPX assumed leadership in prior months relative to COMP I've been more focused on SPX and the sort of laborious process where the Index finally cleared 1295-1300 resistance just this past week.

Some surprises were in store when I went to compare the relative time difference between when there was a clear cut move above prior highs in the S&P 500 versus the 100 (OEX). Surprising then also to measure just HOW FAR BACK the Dow broke out above what was a potent prior (double top) high.

First things first... SPX had spent the week before last laboring in the 1285-1995 resistance zone; with of course 1300 being the elephant in the room in terms of getting people's attention with a cross above it. Finally, SPX broke out above this prior zone of resistance; with little follow through by day's end but with the rally accelerating the next day. From 1/17's 1293 Close to Friday's 1315, SPX gained 1.7%.

The big cap S&P stocks with plenty of bucks (usually) do better quicker if the economy does better OR can better weather any further rough patches.

The S&P 100 (OEX) had already flashed a next up leg well before its stogy big brother SPX on 1/3/12 when it surged dramatically from the 570 area to above 580 thereby generating what was a further 'breakout' move. OEX then stayed above 580 on a Closing basis after first piercing 580.

Once 580 resistance was cleared by more than a slight amount and some days, true to technical precepts, 580 'become' subsequent support. The pullback and rebound from 580 says key test PASSED! From the 1/3/12 OEX Close at 580 (actually 580.56) until Friday's Close at 596, the Index has gained 2.7%; great versus SPX, not so much versus INDU....

I would have been happy to bet on this OEX in terms of initiating some further bullish strategies but was already on board with a more dramatic move made even EARLIER in the Dow which got me into some DJX activity. The move to above the important prior double top was convincing. There was one subsequent Close below 12200 but this was also a single event. A 1-day move doesn't make a trend! Follow along to the green arrow as the next big 1-day surge found support at what had been resistance and a key sign of trend acceleration.

The Dow close on 12/23/11, per my highlight as an upside 'breakout' day, was 12294; this versus INDU's most recent Close at 12720 equaled a gain of 3.4%, making DXJ the winner index on this most recent up leg of the Market. I don't tend to initiate call or put buys on 'breakout' moves but may add to already profitable positions on them.

In hindsight now it's clear to see that the second INDU up leg started (above) on the dip to the 11200 area and a 50% retracement of the prior advance. That's also when the Index was last in the area where the 13-day RSI often 'signals' an oversold extreme.