U.S. equity markets came on strong late last week, as Spanish bond yields imploded (see chart below) as newsbroke that the ECB would be making aggressive bond purchases. On this news, the S&P 500 pushed to new post 2008 highs, bank stocks broke out, cyclicals rebounded and U.S. market internals broadened out nicely,with the NYSE advance-decline line rising to new post 2008 highs as well.
U.S. markets continue to climb a wall or worry and recent market strength will now put more pressure on bench-mark chasers who have under performed and will need to play catch up here by putting more funds to work.While there may be some consolidation or a shallow pullback in the near run, internals suggest this rally has more legs.
Try Lee Adler's Technical Trader risk free for 90 days! Follow the money. Find the profits!