The bulls looked pretty strong today, making large advances across the board - but on relatively weak trading volume. SPX gained $23 to close at a new closing high of $2121. RUT is still much lower relatively on its price chart. RUT gained $13 to close at $1245, but it hasn't even broken its 50 dma yet. The VIX contracted by another full point to close at 12.7%. Trading volume was down modestly with the S&P 500 stocks trading for 1.9 billion shares. Trading on the NYSE was down 1%, but trading was up 4% on NASDAQ. This amounts to pretty modest trading volume for a break-out. The bulls are making a run to break out of this sideways consolidation trading range; can they do it this time? Tomorrow's open on SPX will be a key indicator. Will traders take profits and hide, or confidently buy?

Initial unemployment claims came in at 264k, almost exactly as last week at 265k. And the number of continuing unemployment claims came in precisely at last week's number, 2.229 million. The Producers Price Index (PPI) came in with a 0.4% decrease for April, a change in the wrong direction from last month's +0.2%.

I will be watching the opening tomorrow of both SPX and RUT. If RUT doesn't jump on this bullish bandwagon, it throws doubt on the prospects for a bullish break-out. Historically, small caps lead the bullish markets.