Why Bulls Are Feeling Good

Stocks staged a modest late day rally and gave back some of the gains late in the day, but still ended up. That is unusual, given that the usual trend is to reverse after a large gain.

The important development is technical: the Dow, the NASDAQ, the S&P 500 and the Russell 2000 are all at 5-week highs. In addition:

--oil at 3-month lows

--dollar index at 5-month highs

--Fed not raising rates (probably)

Are all making bulls feel notably better. Bears, of course, laugh at this, noting that housing has not bottomed, the balance sheet of financials will remain poor for the foreseeable future, and economic data is still deteriorating. To suggest that there will be some notable turnaround in the next few months is comical, bears maintain.

But much of this market has become technical in nature. Today’s development are positive for bulls.

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