It Doesn't Pay to Be a Bear

After a one-day pullback, the buyers were back at work. Volume fell, but, for some reason that escapes me, this market seems to consistently rally on declining volume. Breadth, however, was quite strong and some of the stodgy big caps, like Disney (DIS Quote), Microsoft (MSFT Quote) and McDonald's (MCD Quote), performed quite well. Some of the big-cap technology stocks, like Apple (AAPL Quote), Amazon (AMZN Quote) and Google (GOOG Quote) gained nicely, but volume on the moves was quite light. Once again, weakness in the dollar bolstered gold, oil, steel, coal and other commodity-related names, but financials were an obvious weak spot.

Under the surface, there was some choppy action and it looked like we might rollover as the day wound down, but the buyers stepped up in the final hour and pushed us up with some help from a dip in the dollar.

Technically, the major indices, with the exception of the small caps, have been churning for a few days right below key break-out levels. This is a pretty good-looking setup for a move higher. I'm still concerned about some of the weak small-cap action, but overall, the major indices are not an inviting short here.

As I discussed in my prior post, this market has been much tougher to trade for many market players than the indices would seem to indicate. There is a lot of frustration out there and that is probably one of the reasons we continue to have such a strong market with some unusual technical characteristics.