The Dow (chart) and the S&P 500 (chart) closed at their highest point in almost three years while the Russell 2000 (chart) index of small-cap stocks closed the month at record highs. So far so good for Q1 earnings reporting season which is now past the half-way mark. Many companies in a broad array of sectors from commodities to industrials to technology have exceeded their earnings estimates and in some instances provided strong forward looking guidance. Also, we talked technicals the other day (blog) and now seemingly both the S&P 500 (chart) and the Nasdaq (chart) have broken out of a double top formation.

Instinctually you may think how in the world can these markets continue to lift with gas prices in many states now exceeding $4.00 per gallon and joblessness still abound? There are several arguments the bulls and the bears are presenting as to what lies ahead for equites but one thing is for sure, right now there is an insatiable craving for risk and the momentum of commodities and equities alike have become parabolic. Congratulations to all of you bulls out there and as for the bears, one has got to believe at some point and time a healthy pullback lies in the cards.

Enjoy the weekend 🙂

~George