Not Really Like 2009, But This Will Be OK If It Lasts.......

The action today looked very much like what we saw so often in 2009. We had a big gain on the first day of the week, a weak dollar was the main catalyst, there were few pullbacks, and volume was very poor. This was the recipe that drove our V-shaped bounces last year. It was very easy to find problems with the action, but the bears and the skeptics wound up with bull tracks on their backs as the rallies just kept on going.

Many technicians see key overhead resistance level on the S&P 500 as being at 1,100. They seem to think we need to move over that level to totally break this recent downtrend. We had a good run toward that level today and could easily see some follow-through momentum, but I still believe that this market is not going to act like it did last year and go straight back up to highs.

Volume today was not only light but was the lightest we have seen all the year. Normally, a market move on light volume to overhead resistance levels would be suspect, but that truism of technical analysis just didn't work very well for a long time. It certainly is possible that we see that sort of unusual action again, but I'm not betting on it.

I would say one had better not do much shorting until the bears make a better showing. I'm sure the action today has a lot of folks thinking that it is going to be just like 2009 again, but I think conditions have changed substantially in the last month or so, and further upside is not going to come as easily as last year....