Markets exploded higher Thursday as Washington took the spotlight. Volume was soft, the opposite of what you would like to see. However price is how we are judged and price always take precedent. Both the Nasdaq and S&P 500 reclaimed their 50 day SMAs today. What was encouraging was that fact that the leading Nasdaq outperformed today up 2.25%. For the S&P 500 it was the quickest reclaim of the 50 day out of the three occasions it has happened in 2013. Could that mean it will be the fastest time it loses it? I want to make clear I was dead wrong as I stepped to the sidelines this week and I am still leaning bearish. Whipsawing action like this is characteristic of at least a near term top. Markets this skittish on headlines in my opinion are fragile. If the markets follows through with strength there will be plenty of opportunities to take advantage of. Banks were one of the biggest beneficiaries Thursday. The XLF had a big volume surge above its 50 day SMA, which could not be said for the major averages, and retook the 20 handle. Names that look good if this sector continues to deposit gains, pun intended, in GS. Best of breed in the group bounced off its 200 day SMA this week and can be bought with a buy stop above its 50 day SMA at 160.50. It is been making higher highs and higher lows since the spring, albeit by the smallest of measures. Its last high was precisely at the round 170 handle.

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