After two big days of gains, many market players were looking for a pullback. We even had a downright ugly jobs report, but the bears could not dig their claws into this market. They tried a couple times in the morning to push us down, but they finally gave up late in the day and we went out near the highs of the day with some decent gains.
The S&P 500 came within a couple points of a new high for the year but couldn't quite manage it. Breadth improved steadily all day, and by the close, only retailers were still in the red. Gold made a late charge and many of the metal stocks closed very strong.
Today was a very good illustration of the power of momentum. Market players were more fearful of being left behind than they were of top-ticking the market. They were concerned that if they didn't jump in, this market would never pull back and allow them to buy.
We've seen that sort of thing time and again over the past year and half, and it has produced these stunning "V"- shaped moves. The market simply won't let you in and there is little choice but to chase if you want to put capital to work.
There are lots of great reasons that this market should not being acting so strongly. The bears can give us some very compelling arguments, but the price action tells the real story -- and this action is telling us that buyers want in and they aren't worried about anything, including some dismal employment numbers.
With the senior indices so close to highs for the year, there will be very strong pressure to make at least a nominal high in the near term. It is the sort of goal that the bulls have a hard time resisting, so they'll make it happen ... and then the real battle will begin anew.