The broader averages failed this afternoon to break out of their trading ranges of the last few days. This action seems to be normal for a market that has had a fairly strong rally as of the last few weeks. One of the positives is that I'm starting to see more setups on the long side. As I mentioned in an earlier commentary, that is a particularly good confirmation. Also, I like the fact that the semis are starting to join the party.

SanDisk Corp. (SNDK) has been one of the market leaders in this rally. In fact, it has been one of the better performers in the market since July, but for the last few days it has taken a breather.  If Wednesday's high is taken out, I feel a continuation of the uptrend will resume.

Sandisk

This market has many traders scratching their heads, including me, on whether we are breaking out with a substantial rally or if we are falling back to the trading range we have been in for what seems to be the last 25 or 30 years. With that in mind, I'm trying not to predict what is going to happen, just interpret what the charts are telling me. I know I mentioned earlier that things are getting a little better, but be careful; the market could turn on a dime. Remember stops on all your trades and protect your principle and profits.

Tom Incorvia is a swing trader with 18 years of experience in the financial markets.  E-mail him at tincorvia@gmail.com.