Eight Straight, But How High Is Up?

The Dow managed to close in the green again on Tuesday, but just barely, with the other indices following the lead. It brings up the question of whether this is really a rally, or just normal bounded in-range trading prior to some future market event during the great earnings deluge to come.

Dow 12,573.85 +4.71; NASDAQ 2,477.61 +8.43; S&P 500 1,448.39 +3.78; NYSE Composite 9,468.70 +39.49

Over the course of the last eight session the Dow has gained 273 points, or, an average of 34 points per day. If that doesn't sound like much, it's because it isn't. One just one day, April 3rd, the index was up 129 points, meaning the other seven days combined accounted for only 144 points, or just over 20 points per day on average.

Today's gain was less than 4 points. Yesterday's was less than 9. On March 30, the Dow was up 5.60 points. Three days, less than 20 points. The Dow could, and does, do that in a matter of minutes under normal conditions. In percentage terms, these last 8 days of gains amounted to less than 2.5%. 8 straight up days and the average still is 200 points shy of the February 20 record close. What's really going on here?

From a volume perspective, no single day has cracked the 3 billion mark. For purposes of comparison, on the black day of February 27, when the Dow dropped more than 400 points, over 4 billion shares changed hands. If anything can be said of this rally, it's that not everyone is participating, and, while gains are always good, these have not been very much so.

Today's performance was among the weakest, with 2.5 billion shares traded, even though advancing issues on the NYSE outpaced declining issues by a 5-3 margin, on the NASDAQ the margin was more on the order of 8-7.

Once again, it was a phenomenal day for new highs, with 408 issues making tops, and only 71 new lows. Those numbers haven't changed much for about a week, and considering the Dow's feeble close, this mini-rally seems to be at an end. What will propel the market over the next 3-4 weeks - in either direction - will be quarterly earnings, and all of that starts tomorrow.

Oil gained 38 cents to close at $61.89; gold gained 4.60 to $681.50; silver was up 12 cents to $13.93.

The real action starts tomorrow. Don't miss it.