Beneath the bullish headlines market internals weren’t very pretty. The only impressive thing today is markets gapped higher rather than lower at the opening. Given the viciousness of Friday’s sell-off some follow-thru selling would have been expected. Oil prices fell back 3% and home sales data were above expectations. It would be absurd to characterize this data as the start of a trend. Nevertheless, taken together it was enough to give bulls some confidence.

Again, while volume was higher than recent averages, breadth was very poor indicating continued selling.

No one’s really providing the complete data [correctly at any rate] for volume and breadth. Let’s try the WSJ today.

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Global stock markets topped out on the back of the sub-prime/credit debacle in October 2007. Prices subsequently moved lower until reaching climatic bottoms in January/March this year, triggering rallies throughout the world until a few days ago. The big question investors are grappling with at this stage is whether the rise in prices has simply been a bear market rally, or whether we are back in a primary bull market.

I have previously said: “Whereas I am doubtful about the longevity of the rally, I am also not in the Armageddon school. Is the answer perhaps a ‘muddle-through’ market, characterized by below-average returns? That is my hunch, for what it’s worth.” (See post entitled “Poll of the Week: Stock Markets – Which Way

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S&P has tried and failed to overcome the 1400 level consistently over the last couple of months. Today, it overcame 1400 for a bit only to fall back. in fact, as I write this, the rally that has lasted most of the day has completely evaporated and S&P is now lower on the day. For the last week, I have looked at my holdings again and again wondering if I should sell my long positions or trim down. Many of my stocks have been steady and forming nice bottoms or bases (Omniture, Marchex) and some have just been going up at any sign of a broader market rally. Visa, Potash, RIMM, Apple and Nintendo have all weathered the pull backs exceptionally well and I am torn whether to hold on and ride out the bear or to sell and buy at lower levels. But then I have never been good ...