The market was deadly dull until about 2 p.m. EST, when we finally took out the highs of the day. That triggered a short squeeze and buy stops, and we ramped straight up over the next couple of hours.
The bears have been wrestling with a market that has stayed quite sticky to the upside for a week now, and when it decisively moved through 1100 on the S&P 500, they said, "The heck with this," and covered their shorts.
Other than great earnings news lately, there isn't any particular fundamental reason for the strong action - the economic reports have been weak, and the dollar has been showing some relative strength.
I wouldn't be too surprised to see us bounce all the way back near the 50-day simple moving average. We closed just a smidge under that level on the S&P 500, but the bears are obviously becoming quite nervous at how easily the bulls are pushing this market up on such lousy internal action. We still have not had a technical accumulation day since the low eight days ago.
Last year there was only one factor that really mattered, and that was the high level of liquidity. It felt very much like that again today. We still have quite a ways to go to make it back up to the January highs, but low volume and technical resistance just seem to be minor annoyances to the bulls at this point. I'm still not convinced that conditions are the same now as they were last year, but when we have a squeeze like we saw into the close today, you sure don't want to fight it too hard......
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