NEW YORK ( TheStreet) -- U.S. stock futures point to a sharply higher open on Wall Street, following gains in European markets. S&P 500 futures are up more than 10 handles. We are once again seeing investors shrug off bad news and continue buying, a tell-tale sign of a bull market. Last night Slovakian parliament was unable to pass approval of an EFSF expansion, although it is expected to pass in later votes. Alcoa (AA - Get Report) also disappointed with its earnings report, and is trading off nearly 4%.
European officials continue to strike a firmer tone when discussing measures to lift the region out of its current debt woes. Despite Alcoa's disappointing kick-off, investors continue to be optimistic about earnings season. During the rally off March 2009 lows, earnings season has been a boon for stocks. Watch to see if companies can maintain the upward momentum this quarter, especially with guidance.
Investors will also be on the lookout for Fed minutes from the Sept. 20-21 meeting. As a result of that meeting, the Fed announced Operation Twist, a plan to swap shorter-maturity bonds for longer-dated instruments. The plan had three dissenters, and the market reacted very negatively to its introduction, so it will be interesting to see the discussion that went on in the minutes.
With a heavy short interest in the market, stocks are hardly taking the time to pause before breaking multi-month downtrends. Wednesday was a healthy digestion day, and a sign that bulls remain in control. Shorts are getting squeezed, adding fuel to the rally. Some stocks are starting to make new highs, making tremendous moves off the lows. Technically, the SPY will be knocking on the door of bigger resistance very soon. There is a small point of resistance at 1204-1206, and then the major zone is really 1220-1230.Scott Redler is long SNDK, SINA, JPM, XOM; short SPY.