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Another Week Or Two Of Rally Now Underway

The pullback yesterday - on very low volume - leaves the stock indexes in fine shape for a rally into the end of the trading month on Thursday, which also marks the end of the first quarter. Any such rally has the potential to continue into the week after, and such window dressing buying at month and quarter end and beginning should be the prime driver of stock prices between now and then.

Nothing has changed with the divergence/confirmation chart below, with volume and SMH lines failing to confirm the rally, while new highs, transports, and weekly ADX do. SMH and volume line breakouts above their red lines of prior highs are needed to drive the broader stock market rally higher, and I intend to be out of all stocks and ETFs next week if such breakout confirmation fails to land before then.


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(click to enlarge)Click to enlarge

Disclosure: I am long QLD.