It has been a fairly quiet day for the market, with the usual little jig in the final hour. But a quiet day is exactly what we needed after a big gain this week. The underinvested bulls would certainly like to have seen more of a pullback, but after the sharp moves on Wednesday and Thursday, there was a lot of performance anxiety that helped to hold us steady.
The strong move on Thursday following the G-20 meeting and the mark-to-market accounting change convinced a lot of folks that we finally are seeing a true change in market character. The technical action is supportive of that belief, but we've become a bit extended. The problem for the bulls is that with so many folks looking to buy a pullback, we aren't seeing much of one. In fact, they even rushed back in to buy the little dip in the last hour and pushed us to close at the highs of the day.
The trading next week is complicated further by first-quarter earnings, which will start to roll out, and an SEC vote on some variations of the old uptick rule. Expectations have probably increased this week, but overall optimism about reports is probably still pretty low. We'll have a better feel for the psychology once we see a few reports, but the reaction to RIMM certainly is promising in the technology group.
This move may still turn out to be nothing more than just a good bear market rally, but the bulls are obviously in good shape here and should be given the benefit of the doubt.