While last week ended beautifully for the bears and bloody for the bulls, this week begins to the theme song of Laurel and Hardy’s comedy act of the mid-40’s- “The Dance of the Cuckoos.”

The humor of Laurel and Hardy was highly visual with slapstick used for emphasis. Monday’s market action certainly adds an interesting visual component to the charts. And all might agree that slapstick for emphasis describes the giant guffaw the market had today on the back of the bears.

Take the ETF for Biotechnology IBB as an example. It had a classic bullish engulfing pattern (BEP) if you like a visual chart pattern of beauty. For those not familiar with candlestick formations, a BEP forms when the opening and closing prices from the day prior is literally engulfed or swallowed with wider opening and closing prices the next day.

Conventional wisdom says that the following day, the instrument must close higher than the BEP of the day before to confirm. I will get back to that in a bit.

How does slapstick for emphasis apply today?

Slapstick exceeds the boundaries of normal physical comedy. The name originates from Italian meaning a club-like object made of two wooden slats that when struck make a loud smacking noise. The noise emphasized the otherwise benign action where no one really got smacked.

Did the slapstick routine on Friday mean the market did not really get smacked? Was Friday’s sell-off the dance of the cuckoos?

Turning to the Modern Family, three cleared a resistance point known as R1 that indicates a near term reversal of trend. Biotechnology, Semiconductors and Retail. Retail however, remains in a warning phase.

The rest of the Family could be repeating Laurel and Hardy’s famous catchphrase: “Well, here’s another nice mess you’ve gotten me into.”

Transportation, Regional Banks and Gramps Russell 2000 could not clear R1 in spite of the impressive turnaround. Granted, they all sit in bullish phases.

And if you are looking for signs from the interest rate activity today? Sorry. TLT (20+ Year Treasury Bonds) closed flat.

If conventional wisdom says that tomorrow IBB (Biotechnology) must close above the high of today’s bullish engulfing pattern, that is one reliable confirmation to watch for.

Another is to see if the Russell 2000 can clear and close above its resistance point or R1. A third confirmation no less important, is for Granny Retail (XRT) to close above the 50 DMA and return to a bullish phase.

Laurel and Hardy had physical arguments with each other which precluded their characters from making any real progress.

Now that the bulls and the bears have slugged it out, let’s see if any real progress in trend is made by either one tomorrow.

S&P 500 (SPY) Elevator down, escalator up. Held the support at 212 then ran up to the resistance at the 50 DMA. Must clear it and hold.

Russell 2000 (IWM) Held the 50 DMA well. 122 pivotal.

Dow (DIA) Not unusual to see a test of a huge breakout as was this over 180. Now that it was tested and held, 184 resistance to clear

Nasdaq (QQQ) Ran into resistance at 116.75. Now, 114.80 pivotal.

XLF (Financials) Tested the 50 DMA and boom. 24.45 next hurdle to clear.

KRE (Regional Banks) Never looked as weak as the others on Friday so now good to watch for leadership.

SMH (Semiconductors) 63.05 the 50 DMA held to the tick. 66.05 resistance to clear.

IYT (Transportation) I like this bounce so now will watch for it to hold 141.

IBB (Biotechnology) Big Bro showed up! 283 a lot of congestion to hold. 290 to clear.

XRT (Retail) Held support at 43.30 and closed over R1. A move over 44.50 would clear the MAs.

IYR (Real Estate) Maybe a 60+ day low-needs to confirm.

GLD (Gold Trust) Going to like if 126 holds.

SLV (Silver) Over 18.25 better.

GDX (Gold Miners) Fills gap to 27.67 back in business.

USO (US Oil Fund) Noise til it clears 11.10 on a weekly basis.

XLE (Energy) 69.80 pivotal.

TAN (Guggenheim Solar Energy) Maybe a reversal-definitely want confirmation.

TLT (iShares 20+ Year Treasuries) Through 135.80 could see more rally.

UUP (Dollar Bull) Under 24.40 trouble.