(By Rich Bieglmeier) All last week, iStock was waiting, waiting, waiting for stocks to make up their minds. The indexes were dangling in between resistance and support. We felt like Bill Murray in Groundhog Day, writing the same thing every day, the market has to either hit a new short-term high, or get below mid-June lows.
Investors got an emphatic answer on Friday as the indexes ripped higher on the news that Germany Okayed letting banks access the EU's super-bailout fund. iStock will call it E-TARP. Maybe they can get a talking spokesbaby?
The Dow, NASDAQ, and S&P all ripped past their 50-day moving averages faster than Yohan Blake runs 200 meters – you'll see the Jamaican sensation in the summer Olympics.
Whether E-TARP has a long life for bulls remains to be seen. While Friday's returns were eyeopening, volume wasn't all that, a better than average day, but nothing special. However, some substantial technical buy signals came into place Friday that could drive stocks higher in the holiday week.
The Dow and S&P experienced bullish 12/26-day moving average crossovers. The NASDAQ is on plus day away from making it three for three. Additionally, the trifecta stepped higher, moving to their highest levels since May's lows.
Depending on how you look at their charts, the Dow and S&P could challenge their 2012 highs during the summer rally. The NASDAQ has a lot of caching up to do.
Before you get too crazy, the market did nearly the same thing last May through June, and we all know what happened in August.
At 10 am Eastern Monday, investors will get another dose of major economic news. The ISM Manufacturing Index is expected to score a 52. Most of the regional manufacturing reports have sucked, and yet, somehow, last week's Durable Goods Orders did OK.
We have a hard time seeing ISM coming in above target. It could be disastrous if the score falls below 50 as it would indicate… recession. iStock thinks we will get something between 50 and 52.