Updated from 8:12 p.m. ET to include latest information on after-hours trading.

NEW YORK ( TheStreet) -- It's good to be a bull these days.

For awhile now, critics of 2012's rally in equities have been able to point to the money still pouring into bonds, keeping the yield on the 10-year Treasury below 2%, as evidence the surge in stocks was a low-volume phantom. All Apple ( AAPL) and no core.

Tuesday, however, saw a shift as the Federal Reserve's acknowledgment that the economy is indeed improving sent investors scurrying out of bonds. Jefferies described the scene this way in commentary on Wednesday.

"Fixed income investors appear to have capitulated as signs of additional QE quantitative easing fade," the firm said, adding later: "After advancing on thin volume since last year, the switch from bonds could lead to a blow-out phase for equities. The fact that earnings revisions are still climbing in contrast to other developed world markets might force further money into the U.S. The main headwind in the short term is high gasoline prices."

The question now is will the money that flows out of bonds (the 10-year yield wrapped Wednesday at 2.3%) get parked in stocks? If a good portion does, it could be prepare for take-off time for the major U.S. equity indices. Wednesday's mixed action wasn't much of a pullback but breadth was fairly weak with decliners outpacing advancers nearly 3-to-1 on the New York Stock Exchange and 2-to-1 on the Nasdaq, so stocks are likely still a a bit overbought at current levels. At the same time, waiting for a pullback hasn't been much of an investment strategy since October, so restlessness could take over.

After all, the Dow Jones Industrial Average has a six-session winning streak going, and is now up 8% for the year, solidly above 13,000. The S&P 500, the lone loser on Wednesday, has gained 10.9%, putting technical resistance in the 1370 range in the rearview mirror. The Nasdaq Composite is the biggest winner of all, surging 16.7% to reach pre-Tech Bubble levels above 3,000.

Potential positive catalysts seem to be everywhere these days (which contrarians would say is the worst sign of all). Sentiment about the financial sector could cross over from searching for value in beaten-down names to real, live optimism following the stress tests, which were positive for the most part, despite Citigroup ( C) being put in the penalty box.

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