It wasn't very lively, but it was another day of solid gains. Breadth was quite impressive, and the big-cap technology names led the charge. PCLN surprised many market players with a very strong report, and the upbeat action there spilled over to other names like GOOG, AMZN, NFLX and BIDU. AAPL continues to lag, and RIMM is definitely a weak spot, but the more liquid momentum names were the theme today and helped the QQQQ lead the indices.
Once again, the buying picked up in the final hour. Perhaps that is just the computers at work, but it gives the action a much more upbeat feel when we close well, and it definitely keeps the bears very nervous.
Technically, the S&P 500 is doing an excellent job of holding right around resistance at the June highs. The key level is 1131, and the fairly flat action we've had for two days is a good way to set up for a breakout move.
Seasonality turns negative as we move into August, but so far, there are no signs of it. I suspect that the potential for more quantitative easing by the Fed, which is being discussed everywhere, is keeping some firm bids under the market.
We are showing some of the same signs of resilience that drove shorts and underinvested bulls crazy back in March and for most of last year. No-one wants to be caught on the wrong side of that sort of climb once again, and that is helping to give us some underlying support.
If the bears are going to turn this market, they should start making some inroads. Other than being a bit slow, there wasn't anything very negative about the action. As long as the S&P 500 continues to hold over 1115, which is the 200-day simple moving average, I'm not going to be looking for any short plays. The bulls are holding up too well at this point to fight them.