although the major indices lost a bit of steam into the close as market players booked some of their gains, there’s no getting around the fact that it was a strong day for the market. the averages were able to move to a short-term higher high, financials, tech, industrials, energy and consumer discretionary led to the upside, breadth was just under 7:2 to the positive, and while options did expire today, volume levels finally showed some life.
for those technically inclined, the biggest and strongest rallies come in the midst of a primary downtrend, and that is a function of the need for the big money to show performance on a relative basis. a gap like the one we had this morning will get market participants worried about underperforming, and that will trigger a rush to add long-side exposure.
again for those technically inclined, without a doubt, much of the gains this week came because earnings expectations were so low, but the bar has been raised and the market continues to face significant lateral resistance levels. there are plenty of reports due out next week, so we’ll have to see if investors continue to be as enthusiastic as the were this week.