The economy is fueling the market higher.
SPX bounced off the congestion pattern it was creating last few days and closed just near the all time highs set back in 2007. The erratic action seen last few days made many traders nervous and unable to take long positions. This however looks like will be resolving to the upside, disappointing bears who have been clamoring for a nasty sell off.
Whats driving this stock market higher? Its the economy stupid ! As President Clinton would say. Home prices rose the fastest in January ( a very slow month ) in last six years. The builder stocks and XHB all making a new highs. Some of the real estate markets are getting hot again, California and and Nevada where the brunt of financial crisis hit during 2008 recession have now mended those low prices. Not only home values are rebounding but there is a zero inventory to sell homes, which in turn is fueling a frenzy in the real estate markets.
The stock market knows all of that and plus more. The economic data on manufacturing is also good here. Jobless claims have been going down nicely showing less and less people are getting laid off. This has fueled the upside momembtum which the bears of course do not believe in. They are still hoping we will crash soon.
Expect a quiet week because of the Holiday and Easter.