Not only did we finally close over 1100 finally,  we surged to a new intraday high of 1113.   All eyes were on Bernanke and he didn’t disappoint as he was even more ‘dovish’ than at the FOMC.  Unfortunately, eyes set on M. Whitney later and her comments hit stocks.   Still, as the case over and over again, buyers stepped up to buy any weakness and market rebounded by close.   The importance of closing over 1100 is the idea 'finally believing' money will flow into the market.   Volume has been light in this recent rip higher and MF/HF are sitting on their hands after the late October sell off in which many were closing off their fiscal.   How long will this last before they decide to chase or be outperformed once again?.   Maybe some with fiscal end in November, notably HF’s are waiting to sell this November move at the end of the month before doing something in December.   Still,  we’re only in the middle of the month and don’t have to worry about this possible selling scenario yet, the market has room to the upside and it’s next resistance lies in the 1020 2/3’s of March rebound-1022 (oct 07 50% retrace).

What we like particularly today was the small cap action as the R2K was outperforming an already hot market.  The index was up about 3% and we hope this is sign of mid small caps coming to life and potentially giving this market further lift.    We’ve had some nice moves from recent small cap mentions in journal .eg….WYNN $54's to 70, CLF, $37 eps time to 44 today GEOY $27 to 32 in 4 days, WLT, FSYS.   If this isn’t a one day wonder for R2K,  we may see other names come to life from our list (GMCR) or atleast have some pullback in these names to selectively pick at again.   Yes, some of these names can use a pullback soon.   Still, no matter what the small caps may do,  it is the Financials, notably GS  and JPM , we need to see life for more upside this year.