Markets rose smartly Friday after a well received earnings report and the Nasdaq once again led the way with a .6% gain, compared to a .5% move by the S&P 500. It was the Nasdaq’s 4th weekly gain and in each of those 4 weeks it has outdid the S&P 500. This week the Nasdaq rose 1.9% and is now just 1% below a cup base pattern at 4371. A move above that level would put the benchmark at decade old plus highs. It is up almost 400 handles since finding precise support at its 200 day SMA on 4/15. The S&P 500 rose 1.3% on the week closing at the round 1950 handle, which corresponds with, what else is new, an all time closing high. The S&P 500 still maintains a healthy YTD gain of 5.5%, with the Nasdaq up 3.5% in 2014, nipping at that lead every week. There still seems to be a healthy amount of skepticism about this rally, which can be bullish, but their are some warning signs as bullish investment advisors are now at 5 year highs, at 62.2%. Remember however that sentiment indicators are not as important as true price action. New 52 week highs have been very strong with Fridays figures coming in at 350 to 6 new 52 week lows on the NYSE and 150 new highs for the Nasdaq compared with 19 new lows. Many of those highs came from groups essential to economic growth, such as energy, transports, chemicals and even retail starting to percolate. YUM took out a cup base trigger of 79.80 Friday, but volume was below average and closing pennies below the round 80 handle.

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