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Bull Run

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Bulls have much about which to cheer, as they've managed to hold this morning's breakaway gap and add solid gains throughout the session, the INDU +110 8600, COMPX +27 to 1516, NDX +24 to 1142, SPX +12 to 932, OEX +6 to 471 and QQQ +.63 to 28.40 at the time of this writing. Volume is headed to match or slightly lag yesterday's volume.

Sector leaders include Technology, led by TXN +5.41%, Communication led by ADCT +9.43%, Consumer Staples led by MKC +5.10%, while TOM -4.46%, USG -11.52%, and ZL -4.70% lead the losers. There's very little red to choose from so far, however, and barring a sudden show of strength from bears, the only selling will continue to be company-specific.

Today's buying is sufficient to at least postpone any speculation of a breakdown from the ascending bear wedges profiled last night. In particular, all of the indices above their 5 and 13 day simple moving averages, which should act as at least short term support. Adding strength to the bullish case is the toppy put to call ratio, which opened at a high of 1.41 before fading to just below 1.0, with the most recent reading at .89. The high put volumes are generally regarded as bullish on a contrarian basis.

Breadth is solidly bullish but not extreme, with advancing volume leading declining volume just over 3:1 on the NYSE and just under 3:1 on the COMPX. Advancing issues lead decliners better than 2:1 on the NYSE and just under 2:1 on the COMPX. The VIX was down over 1 to 22.56, QQV -.29 to 27.49, and VXN -.81 to 32.56.

Despite this bullishness in equities, the US Dollar Index has been faltering throughout the session, unable to hold above 95.00 after last night's deep selloff. Treasuries have been seeing selling beyond what we'd expect from the Fed's 2.5B net repo drain this morning, with the five year yield up 3.4 basis points, the ten year up 4.3 bps and the thirty +3.1. The commodities index (CRB) has been gaining on the falling dollar, currently up over 1 point to 235, led by cotton, sugar and oil, with June crude trading above 27 per barrel. June gold was down 30 cents to 348.40, June silver flat at 4.82.

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