Yesterday the market gapped up a significant amount and rallied for the first 30 minutes of the trading day setting the high of the day at the 10.00 reversal time. The pullback to the 10.30 reversal time formed a higher low and also set the low for the rest the day. The market stayed in a narrow range between that 10.00 high and the 10.0010, or between “1” and “2”, for the rest of the trading day and left a solid green bar on the daily chart. The SPY was similar. The gap up today was a very significant gap. It was somewhat of a critical day for the daily charts of the market yesterday. The reason was because the two green bars from Thursday and Friday of last week were nothing more than a technical reaction to the support area. There had not been any follow through. Gapping over that hourly base as we discussed yesterday was critical and a very bullish pattern. The market followed through nicely by not ever filling the gap. This greatly increases the likelihood that the market will retest its prior highs on the daily chart and perhaps go directly to resuming its stage II daily chart. On an intraday basis there is resistance at “1”, and support at “2”. The path of least resistance would be for prices to get over “1” and continue the intraday stage II pattern.