Encouraging Signs for Bulls—with One Bear Caveat

Bob Pisani is off; this post was written by CNBC producer Robert Hum.

Some encouraging signs for bulls this afternoon at the close as the markets ended the day at session highs:

1) The Dow Industrials and S&P 500 are up 4 percent during their current 3-day winning streak. In fact, the Dow has now posted its 3rd straight triple-digit gain — something it hasn’t done since Dec. 30, Dec. 31, 2008 and Jan. 2, 2009.

2) The Dow Industrials index is now back in the black year-to-date (up almost 1 percent in 2010). The S&P is just a fraction of a point shy of turning positive this year (1,115.10 is its 12/31/09 close)

3) Dow Theory holds: both the Dow Industrials & Dow Transports have closed at 2-month highs today

4) As mentioned earlier, both the Dow Industrials and S&P 500 are hitting higher highs, reversing a recent trend of lower highs

5) New highs abound: 131 NYSE-listed companies are hitting new highs at the NYSE, the greatest number in 3 months. Additionally, 111 stocks are hitting new 52-week highs at the Nasdaq, the most in 2.5-months.

A number of notable cyclical stocks are hitting new highs too:

Industrials - Deere and Cummins ,

Transports - US Airways , CH Robinson ,

Consumer Discretionary - Autozone , AutoNation .

6) The S&P 500 closed above its 200-day moving average for the first time in about a month.

One caveat: bears point out that amid all of these encouraging indicators, trading volumes remain light. Only 3.5 billion shares changed hand at the NYSE today.

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