Market internals continued to be stellar with the NYSE registering an up to down volume ratio of 19.2 to 1, while advancers beat decliners by a ratio of 5.7 to 1. On the NASDAQ up volume bested down volume by a rate of 5.19 to 1, while advancers bested decliners by a 3.47 to 1 rate. These stellar and continuous strong internals tell us liquidity is still strong.

The rally continues to broaden as well with more groups now participating in the upside. As long as breadth remains good the rally will still have legs. Granted any day we could see reactionary (normal) pullbacks along the way, however given the strong market breadth we are now raising our S&P 500 intermediate term target to 950/960 range. Anecdotal sentiment remains in disbelief of the rally which is bullish, while other sentiment indicators though moderating are not unconstructive yet.

The month relative strength within the S&P reveals the best groups as follows:

1. Health Care Facilities
2. Real Estate Service
3. Tire and Rubber
4. Automobile Manufacturing

So far for this earnings season with 70% of the S&P 500 reporting the average earnings surprise is 4.9% (upside surprise). Consumer Discretionary, Information Technology and Materials on par have had the best results.



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