Market Preview: Bears on the Run

Updated from 7:40 p.m. ET to include additional commentary on Friday's economic data.

NEW YORK (TheStreet) -- And just like that, stocks are back to setting new multi-year highs.

The Dow Jones Industrial Average booked just its third triple-digit swing of 2012 (all positive by the way) to close Thursday at 12,904, its best finish since May 19, 2008, which is of course before the credit bubble burst and Lehman Brothers filed for bankruptcy.

The S&P 500 is now coming up against the last year's peaks from back in April, while the Nasdaq Composite has gone nuts in 2012 (thanks Apple (AAPL)), surging 13.6% through Thursday's close to revisit levels unseen since late 2000. Heck, even General Motors (GM) is getting in the act, reporting its highest quarterly profit ever.

For a while there, the pessimism about Greece seemed to be getting serious but then the headlines turned again and there's new hope that a deal could be in place by Monday.

If that comes to pass and the economic data continues to cooperate (Thursday's initial jobless claims were especially heartening), then it looks like the bulls still have some room to tun. Sam Stovall, chief equity strategist at S&P Capital IQ, expressed confidence earlier this week that the S&P 500 would make a move past the 2011 high of 1363 in the "coming weeks." Now it looks like it may happen sooner than he thought.

"It's been said that fear and greed are emotions that drive market performances," Stovall wrote. "Based on recent equity price action, however, it could be argued that fear is the only motivator: fear of losing money when prices fall and fear of losing out when prices recover. It took five months for the S&P 500 to slump nearly 20% in 2011. It has taken only four months to climb 20%, on improving economic data, calming ECB actions, and selectively stellar EPS reports."

He added: "However, just as it takes several energetic attempts to open a rusty door, we believe the '500' will need to backtrack a few paces before achieving the necessary momentum."

A combination of more positive data and a deal to avoid a messy default for Greece might be enough to avoid the need for any backtracking. Still there are some bearish signs out there as well, as always. For example, TrimTabs points to evaporation of short interest.

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