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Are Rally Naysayers Missing Something?

Wall Street and Main Street continue to fight the rally, but the commentary continues to improve. And that is what matters.

1) all the major indices are at new highs; the Dow is up 8 weeks in a row, its longest weekly win streak since 2004.

2) Dow Transports at new highs this week on strong earnings from railroads.

Transportation analyst Ed Wolfe, one of the most respected analysts in this space, has become much more upbeat in recent weeks. This week, he said channel checks for railroad operators had shown that "recent strong volume trends are being driven by real demand growth, rather than more temporary restocking."

In trucking, Wolfe noted "increased activity in the building products sector," as consumers were spending more on fixing up their homes as the recovery has progressed.

3) new home sales up 26 percent, the biggest monthly advance since 1963 (!). Building material and housing stocks have advanced strongly for two days, as existing home sales, out yesterday, were good as well.

Housing stocks this week:

Hovnanian up 34 percent

Lennar up 23 percent

Pulte up 21 percent

KB Home up 15 percent

Corporate commentary is also strong:

4) the CEO of oil services giant Schlumberger said margins "had bottomed" as oil prices have firmed up; all the major oil service firms are at new highs.

5) Honeywell said there was "clear evidence things were getting better." They boosted earnings.

6) American Express reported corporate spending is coming back. Billed business was up 16 percent year over year.

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  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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