Technically we broke out earlier in the week, but then we went back and tested the new support line. Today's big move is a confirmation of the breakout and is likely to draw shorts and cautionaries back into the fray. A comment by David Tepper that we're in a win-win situation (if the economy recovers, the market goes up, and if the economy tanks, the Fed will intervene and the market goes up), looks to have got things going. Volume is still enemic, but breadth is humongous. Even though we may be entering a new range, I doubt we're out of the woods and this could all be a little premature. Having said that, if the market gets its courage up, it could have a real nice end of year rally.
If you're looking for a fundamental spin on the breakout, about the best I can surmise is that some of the leading edges may have started looking beyond the current soft patch, and are anticipating greater recovery in the future (leading to sustainable earnings growth and expanding multiples). Right now, all we have are expanding multiples (risk on).
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