Stocks are in breakout mode with a worldwide rally on Monday. The Dow Jones Industrial Average and the S&P 500 are hitting new 2009 highs on improving retail sales numbers and a falling dollar. Investors ignored comments from Ben Bernanke this morning about the need for a stronger dollar. The currency continues to slide lower and that's fueling a rally in commodities. Crude oil is up 3.6%, which is really helping the energy sector today. Meanwhile gold futures have hit new all-time highs near $1,135 an ounce.

The major foreign indices were up across the board. Stocks in China were surging on expectations that the yuan might appreciate following President Obama's visit to China this week. The Hong Kong Hang Seng index closed up 1.7%. The Chinese Shanghai index rallied 2.7%. In Japan traders briefly bought the GDP news this morning, but the NIKKEI index settled with a 0.2% gain. This morning's data put Japan's third quarter GDP growth at +1.2%. This was the second positive quarter in a row, but investors have been worried about waning domestic demand for months now and the tone in Japan remains a cautious one.

The rally was definitely widespread in Europe. Resource names were some of the best performers thanks to a weaker dollar. England has some housing data this morning. Home prices fell 1.6% from a month ago, but they were actually up more 1% from a year ago. The English FTSE index rose 2.0%. The French CAC-40 posted a 1.5% gain. The German DAX managed a 2.0% gain.

Here at home in the U.S. stocks were getting a boost from the latest retail sales figures. The Commerce Department said October retail sales rose 1.4% versus estimates for a 1.0% gain. Yet that's not the whole story. The government revised September's retail sales downward from -1.5% to -2.3%. Furthermore October's gains were fueled by a huge 7.4% rally in auto sales. Excluding autos, retail sales only rose +0.2% compared to estimates at +0.4%. It seems that the market doesn't care and investors are back only hearing positive news, which is a dangerous if you're bearish.

Monday morning also brought some individual retail news. Goldman Sachs (GS) upgraded Nordstrom's Inc. to a "buy" and downgraded J.C. Penney (JCP) from a "neutral" to a "sell". Elsewhere Lowe's Cos. (LOW) reported earnings that were inline with estimates and offered some relatively positive comments on the housing market. Tomorrow brings additional earnings news from Home Depot (HD), Target (TGT) and T.J.Maxx (TJX Companies).

Currently the major indices are extending their gains. The S&P 500 is up 1.8% and soaring past the 1100 level. This is crucial resistance and a strong close above the 1100 level would be very bullish. The DJIA is up 1.5% and hitting new 2009 highs at 10,430. The NASDAQ composite is participating with a 1.6% gain and a new 2009 high above the 2200 level. The small cap Russell 2000 index is really on the move with a 3.2% gain and a bullish breakout over resistance at its 50-dma and the 600 level.

Let's take a quick look at charts for some of the major indices:

Chart of the S&P 500:

Chart of the NASDAQ:

Chart of the Dow Industrials:

Chart of the Russell 2000 index: