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Against the odds, stocks managed to make forward progress last week - the fifth straight positive week for the market, and the sixth winning week in the last seven. At this point it's hard to say that stocks haven't convincingly shaken off the woes of last fall. Yes, they're overbought right now, but that's a short-term drag. In the bigger picture, with the NASDAQ at new 52-week highs and the other indices knocking on that door, the long-term bulls have something to be excited about.

We'll compare the long-term and the short-term in a second. First, let's poke and prod last week's exhaustive economic numbers.

Economic Calendar

We got a ton of economic data last week… more than we can discuss in detail. So, we'll hit the highlights here; all the rest can be found on the calendar below.

First and foremost, unemployment is at least a little less of a problem than it was a month ago. The unemployment rate fell from 8.5% to 8.3%, and the government says 257K new private (non-government non-farm) jobs were created on a net basis in January. The criticism of the numbers being touted still exist [accusations that the data we're hearing excludes a big chunk of the unemployed pool] - but the fact is, the total number of working Americans is falling, and the total number of unemployed Americans is falling.

But the jobs these people are getting aren't great? Not so fast -- the average hourly wage is higher now than it was two years ago.

None of this is to say things are 'great', because everything is still a struggle. But, things are at least getting better, even if slowly.

There was other news besides the unemployment snapshot last week, believe it or not. New as well as continuing unemployment claims both fell. Personal income was up by 0.5% (versus an expected growth rate of 0.4%), and spending was actually flat (versus an anticipated 0.1% increase).

The dip in spending -- despite the rise in incomes -- somewhat jives with the dip in consumer confidence; the Conference Board's consumer confidence score fell from 64.8 to 61.1… a surprising pullback, all things considered.

All the rest is below.

Economic Calendar

Clearly, the coming week is going to be less eventful. In fact, it may be downright boring from an economic report standpoint. The only item of real interest that we don't really know what to expect with is Tuesday's consumer credit. It's unlikely we'll see another $20.4 billion increase in fixed loans, but even the anticipated $8.5 billion increase is a big deal. [Note that almost all of December's $20.4 billion improvement stemmed from student loans. January's may not be much different.]

S&P 500

When it was all said and done, the S&P 500 SPX (NYSEARCA:SPY) rallied 2.17% last week, most of it on Friday following some encouraging unemployment data. The S&P 500 as well as the Dow (NYSEARCA:DIA) are teetering on the brink of new 52-week highs, and the Dow actually closed at a new 52-week high close, and the NASDAQ (NASDAQ:QQQ) is well into new 52-week high territory.

But can the market -- and the S&P 500 in particular -- continue to march at its current pace? Trend-followers have to like the direction of things, and are likely inclined to stick with the trend that's in motion. But, at some point common sense and reality have to kick in, and suggest to the majority of investors that the indices are stretched thin at their current levels.

Just for reference, the S&P 500 has gained 11.5% since the last major low (December 19th). And, with Friday's surge, the index is once again brushing the upper 20-day Bollinger band (dark green)… which has been containing rallies pretty reliably for a couple of years now. Note that we didn't say 'ending rallies', but rather, 'capping rallies', meaning the S&P 500 isn't likely to accelerate from here.

That being said, a lack of a bullish parabolic move may be the least of our worries at this point.

Take a look at the CBOE Volatility Index (NYSEARCA:VXX) (NYSEARCA:VXZ). Though in a downtrend, it's struggling to push under its lower 20-day Bollinger band (orange) itself. In fact, the shape of Friday's bar is another hint that -- via the VIX -- traders are quietly and subconsciously hedging their bullish bets. Why do we think that? Although the VIX closed lower, it also closed at the upper end of the daily range, telling us the bearish positions were trickling in late in the day, when push came to shove. In fact, the VIX has been closing at the upper side of its daily range for most of the last few days; the bulls are getting a little hesitant here, despite the market's ongoing gains.

SPX & VIX - Daily

So what's the prognosis? As we've mentioned a couple of times recently, your timeframe is everything.

In the short run, even the die-hard bulls have to be getting nervous here. The S&P 500 is not only bumping into the upper Bollinger band - which is where most of the major pullbacks have been starting lately -- at the same time the VIX is straining to move any lower. The kicker is how the S&P 500 is now 6.3% above the 50-day moving average line (purple)… an extreme distance that rarely doesn't result in a sizable contraction. It's not started yet though. The triggering event will be a pullback under the 20-day moving average line (blue) currently at 1308.53. Notice how the 20-day average line acted as a floor and springboard last Monday.

In the long run though, the bulls have done some solid work in getting the market out of the funk of Q3-2011. We got a key so-called 'Golden Cross last week, which is a cross of the 50-day moving average line above the 200-day moving average line. With all of the last eight Golden Crosses, the market is higher six months later. So, if you're not thinking like a long-term bull here, know that you're betting against the odds.

Earnings Scoreboard

Just a quick update on how Q4-2011 earnings season is going… In a nutshell, earnings have been as mediocre as expected.

With 273 of the S&P 500's companies having reported, bottom lines are up a mere 3.5% on a year-over-year basis. When removing the finance sector from the equation though, the improvement ramps up to 8.2%. Only 60% of the surprises have been positive (less than the typical 67% to 71%), while 30% of the surprises have been negative (more than the 19% to 21%). The 'mets' rate is pretty much inline with the norm of just under 10.0%.

Source: Weekly Market Outlook: Bullish Golden Cross