Nine reasons why we can go higher on July 1st

One thing I like about the market is there's always something astonishing going on. Today it was the 154 point solid green candle the Dow put in. In just four days, we erased very nearly all of the losses from the entire month of June. Amazing.

So after such a big four day rally, can we still possibly go any higher? I get nervous saying it, but I think we still can, and here are no fewer than nine reasons why:

1. Today's gain was a solid green candle with no hint of indecision to it, not like a doji or other potential reversal indicators.

2. This week started off with a three white soldiers pattern and that's usually a very good rally indicator. Today's gain confirmed that.

3. Tuesday we exited the descending regression trend channel that's been bedeviling us since the start of May. That was a bullish trigger, and when that trigger was pulled, the bull ran like mad.

4. Tomorrow is July 1st. The first day of the month is historically bullish.

5. Today the Morningstar Market Fair Value Indicator, which has been gaining over the last few days went back over 1.0 for the first time since the beginning of June. That is not consistent with further market deterioration.

6. Both the Dow and ES are well above their daily pivot points, though not yet so far as to be overextended.

7. Just as the market put in a double bottom this week, the dollar put in a double top and broke under its confirmation line today. It shows no sign of turning tomorrow. Lower dollar, higher stocks.

8. The Dow weekly chart is still looking very strong.

9.  Volume has been increasing for the past three days, indicating we're not running out of buyers just yet.

And I've only got two contrary signs:

1. The VIX fell again today as I had expected and actually hit its lower Bollinger band before ending up forming a hammer. That is a potential reversal sign. Right now the VIX looks to have more chance of moving higher tomorrow than lower. Higher VIX, lower stocks. But remember, the market can lag a turn in the VIX by up to two days, so even a higher VIX tomorrow does not necessarily preclude further gains.

2. The ES indicators have now climbed into overbought territory.  But that can often go on for several days before the top is in, so that's not really 100% reliable at this point.

I guess we'll just have to see.