Traders returned from the long weekend in an optimistic mood. Trading volume remains relatively low, but all of the major market indexes rose. SPX closed up $11 to a new all-time high of $1912. RUT wasn't to be out-done, rising $16 to close at $1142; this close may be significant in that it is above the 50 dma at $1140; RUT broke down through the 50 dma on March 26th. RUT has been trading weakly for a long time. Volatility was roughly unchanged with the VIX increasing less than two tenths of a point to 11.5%. Both SPX and RUT gapped open higher this morning, a very bullish sign. Trading volume naturally increased from Friday's light holiday trading volume with a 16% increase on the NYSE and an 18% increase on NASDAQ. The S&P 500 stocks traded 1.8 billion shares today, an increase from Friday, but well below the 50 dma of 2.2 billion shares. So we are continuing to see a bullish market on low volume. But NASDAQ composite and RUT appear to have turned the corner and are now recovering. NASDAQ gapped open this morning and rose $51 to close at $4237. Unlike RUT, NASDAQ has left its 50 dma in the dust ($4017).

Durable goods orders increased 0.8% in April, but the March numbers were revised upward significantly, so analysts were encouraged that business appears to be investing in capital goods like manufacturing equipment. The Conference Board's consumer sentiment survey increased to 83.0 for May from 81.7 in April. Case-Schiller's housing price survey came in at an annualized rate of 12.4% for March.

The market's exuberance contributed to my SNDK diagonal spread needing to be closed today for a 22% gain; the stock price was running through my window of profitability, but a 22% gain in one week isn't too bad. My June iron condor position on RUT is now up 23% - very nice.

We'll see if this strong bullish move can continue. It doesn't seem likely to me, but maybe that assures us that the move will continue.