Interesting session yesterday

Whilst the SPX managed to closed up slightly positive yesterday, the market internals were fairly weak to say the least with volume coming in well below average as well. This kind of a setup has led both of my quant subscriptions to suggest a very short term bearish edge, however as I type this, the market is surging higher on the back of the better than expected Alcoa earnings and no doubt that investors are anticipating that this tone will continue as earnings seasons kicks into full swing. Volume is coming in quite a bit higher yesterday and market internals look strong with the NYSE A/D line well over 2000 and breadth (up volume/ down volume) on the NYSE and Nasdaq in excess of 90% so far. We have gapped up and not look back this morning so the odds favour a trending day. Bonds are well off the highs now so that suggests that this rally is for real. It looks as though all the sovereign risk concerns and other issues are a distant memory. To me this kind of price action is typical of a cyclical bull market in an otherwise secular bear. I'll try and explain more about this in another post. At this point, I'm leaning towards the bullish side and we should see the market try to rally to 1130 on the SPX before the end of the week is out.