The market rally which began late last week got well underway on Monday. I believe I heard the word "soars" in relation to the market at least a dozen times on Monday. So, why, I ask you, are so many scoffing at the rally?

I heard excuses ranging from "the volume is too light" to "

Greenspan

is going to talk rates up in his speech on Tuesday." Of course there was my favorite comment of all: "We don't know why the market is rallying." If you want a reason to diss this market rally, there are plenty to choose from.

So, why are all these rally excuses so bullish?

Because if we don't know why the market is rallying (i.e., no specific piece of news) then we must go with the move. Since the market will do what it can to make the most amount of people wrong, it does not show its hand at turns. If everyone knew why the market was going to zoom ahead, then they would've bought in anticipation of the move and the news would already be priced into the rally. However, in this case, everyone knew all the negatives about the market and they were already priced into the decline. Now we must wait for the good news to come out (whatever the news may be) before we assess how well the market reacts to that news. Until then, the trend is your friend, and that means up.

What I find most interesting is that the advance/decline line was the best it's been since mid-January, and it was only casually mentioned. Much more focus was put on the lack of volume, which was not light; it was exactly in line with the roughly 700 million shares we've been trading lately.

This better advance/decline line had a positive effect on several of the momentum indicators. The most notable indicator turn came from the McClellan Summation Index. This indicator, based on the advance/decline line is a very slow-moving one. It has not had an uptick in nearly two months. One day's action does not turn this chart; it takes several days' action to first improve, then turn this indicator. It had begun slowing its descent last week, and Monday's action shows the smallest of turns on the chart. I suspect this move will accelerate over the next week or so.

In addition to the McClellan Summation Index, the number of stocks making new 52-week highs vs. the number making new lows has improved. While the number of stocks making new highs must begin to expand (or we will become wary of this rally), the momentum of new highs minus new lows on a 10-day moving average has turned upward as well. Again, this is the first real turn we've seen since early January.

(Note: Before I get a slew of emails pointing out the small blips upward in this chart since January, please understand that I calculate this myself and therefore know what sort of numbers we will be dropping for the next 10 days, which is why I can speculate at the turn. Prior to this, the numbers we were dropping did not warrant a change in direction.)

And finally, the chart I showed in

Friday's column of the 10- and 30-day moving averages of the net of the advance/decline line in fact did give a buy signal on Monday. These signals (when they come in conjunction with other indicators turning positive or negative) will tend to give us a market swing that lasts about three to six weeks.

I can calculate a target on the

DJIA

in the 10,000 area and one for the

S&P 500

near the 1340 level.

As for individual stock charts, the positive side is filled with financials.

American Express

(AXP) - Get Report

,

J.P. Morgan

(JPM) - Get Report

and

Citigroup

(C) - Get Report

in the DJIA should make a try for their old highs.

Also in the DJIA,

Alcoa

(AA) - Get Report

is still good. So is

Disney

(DIS) - Get Report

and

Johnson & Johnson

(JNJ) - Get Report

.

Merck

(MRK) - Get Report

is doing fine but up at its old high; buy dips.

Keep your eyes on

Procter & Gamble

(PG) - Get Report

-- a move through 94 would be a breakout from an eight-month consolidation.

Elsewhere, there are plenty of improved charts. In the financials,

Chase

(CMB)

is obvious, with its new high. But

BankAmerica

(BAC) - Get Report

is also a good chart.

Merrill Lynch

(MER)

has been in a correction for four months now and appears ready to move again.

Delta Airlines

(DAL) - Get Report

is much better than

AMR

(AMR)

; it's got a great big base.

Limited

(LTD)

has broken out in the retail group.

Nike's

(NKE) - Get Report

small pullback is a positive -- buy it.

General Mills

(GIS) - Get Report

and

Kellogg

(K) - Get Report

in the cereal group are good charts. In tech land, my two favorites are still

Motorola

(MOT)

and

Intel

(INTC) - Get Report

.

Nucor

(NUE) - Get Report

is still building a great base. And finally, look at

Telmex

(TMX)

-- that's a big breakout from a multiyear consolidation.

It appears the correction has come to an end. While I will be the first person to point out lagging statistics or failing rallies (if they should appear), I cannot ignore the current underlying improvement in the market. There has been a vast improvement in the charts and the statistics over the past week or so, and that is a reason to be planted on the positive side of this market. No excuses.

Helene Meisler, based in Singapore, writes a technical analysis column on the U.S. equity markets Tuesdays and Fridays. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Meisler trained at several Wall Street firms, including Goldman Sachs and Cowen, and has worked with the equity trading department at Cargill.

As originally published, this story contained an error. Please see

Corrections and Clarifications.