Favorable Signs

The stock market has finally strung together two days of powerful, meaningful gains. Tuesday and today have been marked by increased volume and broad participation by various market sectors. Increased volume shows the big money players are more confident of the future - they are the players that propel stocks higher (or lower). I can conjecture as well political and economically also; a cease-fire that held, tame inflation news Monday and Tuesday, and signs of a generally slowing economy, which would argue against further interest rate hikes. Also, most major earnings reports are now released and the corporate news flow will be slack until mid-October. Finally, perhaps, the sellers over the past couple month have just run out of stocks to sell. Interesting to note that the popular averages made three successive lows in May, June and July, and now the August action has been positively higher. With technology companies providing the backbone for a big portion of investor interest, it was pleasing to see a very good earnings report today from Hewlett Packard and Cisco Systems last week. Tomorrow's opening may indeed be strong. Qualcom, Apple and Intel may have seen their lows for the year as well. But...before jumping back in with reckless abandon, we need to survey the charts and volume action stock by stock.