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The major indexes are both at interesting junctures right now. The SPX is right at its highs for the year, which were made back in May. A bullish scenario from here would be for the index to consolidate a bit around these levels, and then breakout to new highs on good volume.

Also, you can see that the 50-day moving average is in the process of breaking back above the 200-day average. This is a good sign to technicians. If the SPX does have a pullback, you want to see it find support at its now rising 50-day.

As for the Nasdaq, the COMP spent the last two sessions probing its overhead 200-day. Today, it has broken above this resistance. It would be bullish to see this key moving average begin to act as support, as opposed to resistance.

The markets look short-term overbought right now, but don't necessarily need to go all the way back to oversold levels. Some sideways consolidtion would be just as good to work off any short-term excess.

And under the surface, we should continue to be watching for individual stocks breaking out on high volume. Earlier this week, I highlighted a handful of stocks breaking above their respective 50-day averages. This is a good place to look for beaten down stocks that could continue to enjoy a rally.

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