The NASDAQ Composite gapped up Friday morning on the strong employment report numbers and broke through resistance at 2879. The rally gained strength through the day and closed up 1.6%. Volume was 30% above the 50 day average showing that the rally had strong support. This week's price action was strong and deserves several comments.

• Friday was the third accumulation day for the index this week indicating there is now strong buying interest.
  
• The nine month chart shows the index is now just outside the 2-standard deviation Bollinger Band. This does not mean that a retrenchment is imminent, but it does mean that upward moves are likely to be less dramatic than we saw in the last four days. A feature of Bollinger Bands is that they widen or contract as price momentum waxes and wanes, so the 2-sd band can track the price move further upwards. It is price that moves the bands, rather than the bands controlling the price!
• Average daily volume, which was weakening from last October through to the start of the year is now trending up. You can see from the chart that since the start of the year, volumes have been mostly higher than the 50 day average.
  

No new features this week.

Writing computer algorithms to recognize chart patterns is fundamental to what we do at breakoutwatch. In fact, writing computer algorithms for stock analysis, transportation analysis and econometrics has been one of many joys of my life, so I am naturally very interested in how algorithms increasingly control how markets move. But algorithms don't just control the stock market, they increasingly control many aspects of our lives and getting an edge in their design and execution is becoming paramount, and expensive. You might find this talk at TED interesting, I did. How algorithms shape our world .