Admittedly, Friday took us by surprise. We began with a negative bias, but even when it became obvious that the market would firm, we stood by. The 200 daily moving averages remain intact.  Although volume was light, the broader market managed an accumulation day in volume. The indexes are still in strong warning phases which means proceed with caution, especially since the S&P 500 now approaches overbought on the daily relative strength index and shenanigans in Europe are far from over. Last week's big up day has established a light resistance area to clear. The overhead 50 DMAs are far more significant. Equally significant is Friday's low as support to hold.

S&P 500 (SPY) Friday low 131.15 to hold. Number to clear 5/29 high.

Russell 2000 (IWM) Stopped at 5/29 high last week and landed on the 200 DMA and held. Now, 77.50 is the weekly moving average before we look again at the 50 DMA overhead. And that is provided the 200 DMA keeps holding.

Dow (DIA) After showing up as the best performer going into last Friday, it held the crucial 124 support and ran up closest to the 5/29 high, closing just shy of it. Bullish engulfing pattern as well. Volume was light. It's possible that this could be first to run to the 50 DMA albeit with continued light volume.

NASDAQ 100 (QQQ) Possible it will gap above the 5/29 high right out of the gate. Again, low volume, but has eked out 3 accumulation days. That is positive. Like the others, remains in a strong warning phase, but the attraction to the overhead 50 DMA could be strong, unless it breaks Friday's low

ETFs:

GLD Double bottom from 2011 and 2012 intact although phase remains bearish

XLF (Financials) I began 2012 looking here for a lead. First 4 months delivered. Now, a gap over 14.30 would be compelling. Otherwise, 13.80 is the number to hold.

IBB (Biotechnology) I know this is premature, but looking at the best performing sector for the first ½ of 2012, recent activity suggests it could be forming a top.  Time will tell.

SMH (Semiconductors) 31.80 needs to clear or 31.00 to hold.

XRT (Retail) As a strong performer of the first ½ of 2012, another important sector to remain firm and tackle that 50 DMA or will begin to see this as toppy.

IYR (Real Estate) It appears that the worst is over in this arena. Can it lead the market higher?