Nice Rally For This Sleepy Monday

Today's action was not what the bears had hoped for. The market just kind of grinded higher in what turned out to be a very good day, despite the fact that volume was light ahead of July 4th, and most people were out today extending the long holidy weekend.

The SPX, COMP, and RUT were all up around +0.8%. The semis (SMH) and brokers (XBD) had very strong days, up +1.3% and +1.8%, respectively. Breadth was solid, and the Hi/Lo index is now positive for both exchanges.

Technically, the SPX is now above its 50-day moving average, an area many though would provide stiffer resistance. The next area of short-term resistance is the 1290 level, which was the June highs.

More stocks are beginning to breakout. The sector that is showing the most leadership right now is the Transportation sector. I am seeing scores of stocks from that group breaking out to new highs. Talk about a contrarian high-energy play.

I'll be back with a mutual fund update later--
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