Markets rose nicely Tuesday with the confident Nasdaq leading the way with a 1% gain. Volume on the Nasdaq came in above normal, but lower than Monday levels. It looked as if some late day selling was going to transpire but the benchmarks gathered some momentum into the close. It was the first day up in four for the major indexes, with both the Nasdaq and S&P 500 both sporting bullish flag patterns. The Dow which we tend not to follow that closely also has a flag formation in place, its being sideways, rather than slanted downward like the Nasdaq and S&P 500. Its tight range between 16400-16600 should make for a nice move whichever way it decides to break. “Big Blue” (IBM) gave it a big boost today rising 4 handles. Remember the Dow being a price weighted index gives more importance to higher priced names. IBM is the second highest priced stock in the exclusive index behind V. Big Blue may not be feeling blue much longer if it can manage to recapture its 200 day SMA. It was stopped there today, as it was back when it reported earnings on 7/18. That day the round 200 handle came into play too. Talking about the two biggest Dow members, V looks solid here as well. It like many other stocks and the aforementioned indexes has formed a bullish flag pattern with support at the 220 handle. Will it charge the Dow above the 16600 level, pun intended?

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