Last night I wasn't quite sure what to make of the mixed signals the market was giving. The technical indicators were all showing quite overbought conditions but the futures were all up by fairly significant amounts. Today's impressive 81 point gain in the Dow shows that the futures were correct and the indicators are now all broken.
There are many instance of this over the past year, where the indicators can all stay in oversold condition for days or weeks at a time while the market just continues higher. We may be starting another such run now. The fact that we closed above yesterday's high today at 12,279 and are now at the tippy top of the pre-Japan crash consolidation range is pretty bullish.
Tomorrow is historically not a good day in the market, but with the end of the month (and quarter) coming up, it's getting to be time for some window dressing. The fact that the futures are once again up by over a third of a percent (the NQ is up nearly half a percent) this late at night (2 AM EDT) is encouraging for tomorrow.Today's close also keeps us within the rising regression trend channel begun at the trough of the Japan crisis on March 17th. That's also bullish.
After we broke above the daily pivot at 10:20 AM today, it was all uphill from there. Look for more of the same tomorrow. From here there is no more meaningful resistance until Dow 12,390.
Absent any new disasters out of Libya, Japan, the PIGS, or any other new catastrophe, I'd be looking for higher stock prices tomorrow.
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