The NASDAQ Composite rose for the eighth successive week on substantially higher volume but the hanging doji candlestick for the week shows that buyers and sellers were pretty much in equilibrium with buyers just winning. The heavy selling came on Thursday as traders took profits ahead of the uncertainty of the bank stress test results. But by Friday, optimism was restored and the markets recovered all of Thursday's losses. The financial sector led the way with a 7.4% gain in the S&P Financial sector on the news that none of the 19 banks tested were insolvent which pushed aside any concern that 10 of the 19 needed an additional $75 billion in new equity capital to survive if the economy worsens.

We have a curmudgeonly view of the validity of the stress test results but perception is more important than reality in the markets so we will happily put those views aside and instead rejoice in the rising confidence.

The number of breakouts jumped from 20 to 32 this week returning 6.9% at Friday's close.

Chart of the Week

Most charts on our cup-with-handle watchlist have lengthy cups corresponding to the steep market decline beginning last November and bottoming in March. An exception is ICU Medical (ICUI) which set a new 52 week high on April 30 and has since formed a well shaped handle. ICUI scores a 6.2 out of 7 on our technical scale and 9.3 out of 11 on our fundamental scale. First quarter profits were more than double those of a year ago.