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Stocks roared ahead Monday in the best day in months as Friday's key reversal - short term or otherwise - led to continued momentum. The S&P 500 gained 2.0% and the NASDAQ 2.2%. Everyone's most watched stocks, Apple (AAPL), surged 7.2% off incredibly oversold levels. The main theme of the day was continued positive thoughts about the fiscal cliff along with some decent housing data. But more likely the key takeaway was this was a technical bounce that was overdue.

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With markets so extremely oversold any hint of positive news would be a potential catalyst for driving markets higher. Friday, investors received such news - although it was nothing more than some constructive comments from Congress in regards to talks about the now tired "Fiscal Cliff". The S&P 500 gained 0.48% and the NASDAQ 0.57%; modest gains but after two weeks of pain, they were welcomed. Technically the S&P 500 fell almost perfectly to its 61.8% retracement of the entire June-Sept rally - quite ironic in terms of the timing of this news to have the index bounce off this level.

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Thursday could be characterized as more of the same as stocks traded in a narrow range, with the S&P 500 falling 0.16% and the NASDAQ 0.35%.   This continues a pattern of stocks either falling steeply or simply being range bound, and going sideways rather than starting an oversold bounce everyone is now waiting for.   The [...]

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QE unlimited has removed all the artificial market strength. No longer can simple stimulus speculation headlines cause broad market rallies on command. Since the announcement of QE unlimited, the S&P 500 is down -7.1%.

The biggest surprise today comes from Facebook (FB), which proved skeptics wrong by rallying +12.59% even as 804 million shares became available for insiders to sell on the open market.

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Tuesday was a roller coaster ride for the market. After gapping down on the S&P 500 to last week's lows near 1370, a furious rally took the index up nearly 20 points just after 11 AM. Then a slow descent happened the rest of the day, highlighted by a drop of 5 points in the closing 45 minutes. In the end the market was actually down from the previous day but up from where it gapped down to. That said, this type of action was unhealthy. For the session the S&P 500 fell 0.4% and NASDAQ 0.7%.

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