WOW! That was something of substance. Sure, volume was light and the financial sector made up 30% (10pts on the S&P500 index) of the total return, but up is up.

Last week it became apparent that there was the real potential that we were seeing a move to the materials, industrials and general commodity sectors. This would be on cue if we were actually experiencing a economic and market recovery. As these follow consumer cyclical and technology sectors, it would make sense that investors would target these companies if news within the housing markets began to brighten.

(Listen to TDI Podcast 107 as I talk with David Wheelock of the St. Louis Federal Reserve bank on this topic)

It is still unclear if it is green shoots, green ooze or green envy that we are seeing when it comes to the positive reaction to all economic reports. While there is a bright silver lining well positioned by MSM, it should be looked at with a skeptical eye as this turn has happened with ridiculous speed.

One note about the day that was concerning is that no matter what the news, it was taken as a new reason to push higher. Wells Fargo (WFC) needs to raise capital… push higher. Buffett scolds CEOs…even higher. Massive downgrades from S&P and Moody’s…even higher. Credit card delinquncies rising…up, up up!

It has been said over and over that a market that can withstand bad news and still move higher is the sign of a bull. You just need to figure what type of bull it is and then invest accordingly it seems.

Below are the S&P 500 GIC sectors and how they performed today. Notice the amazing percentage of gaining to losing stocks. Also, look at the concentration of performance that benefited the entire index that can be traced back to the Financial sector, energy and industrials. This is definitely a nice rotation that provides the bull camp additional support with their assertion that the rally “is for real.”

If that is true, then 940 here we come. If not, next stop…. 750.