It was a very good week for the bulls, but there was no lack of confusion. The week started poorly Monday, but jumped sharply Tuesday as market players correctly anticipated a very good earnings report from AAPL. Wednesday it looked like it would stall, but news of progress with the debt issues in both the U.S. and Europe hit Thursday. That caught many folks leaning the wrong way and produced another spike higher.
Ironically, it was macro news that really drove buying, while earnings news was generally poor, with a few exceptions like Apple, MCD, IBM and GOOG. The problem with macro news as a driving force is that there is a risk that it can reverse immediately as things develop. News of a debt-ceiling deal one minute may lead to news that the deal has fallen apart the next. That doesn't happen with earnings, so that is usually a preferable driving force.
Given the risk of negative headline news over the weekend, I'm surprised the market held up as well as it did today. On the other hand, market players have learned that this market has a strong tendency to continue to run up as the big-picture bears grow louder. Overbought conditions tend to become even more overbought, and the folks trying to catch a top end up fueling further upside.
If that tendency wasn't tricky enough, the lack of a positive response to earnings reports isn't helping. Some stocks did bounce back as dip buyers showed interest in stocks that were punished on reports, but the overall response has not been nearly as euphoric as we have seen in recent quarters.