The market is looking to move for another leg higher. It really needs to get above the key resistance mark of aprx. $39.75 and thus send us into $40.00 and then test new levels. The market is showing the bull flag kind of pattern (consolidating through time) and has found support of the 1 day moving average and the selling that occurred a few hours ago seems to be the trap that starts the move higher. The uptrend line (not shown on the image) that connects the lows from the last time we were at $39.25 was broken and because the first move was to the downside and it has regrouped it this well and the volatility level I have been tracking is below 8 and very low.
Image below is the 650+ year inflation adjusted chart updated for 2011. Feel free to use this original image as you wish in your presentations. Data comes from the 650 year chart as well as shadow stats aprx data since the start of the Federal Reserve. To enlarge this image "double click" on the chart and use the right click on the mouse to save the "PNG" image file.
The volatility lately has dried up to very low levels and this has helped out the bulls or for the market to go higher. Today's intraday low was $39.24 and the intraday high was $39.71 for a difference of only 47 cents. This movement top to bottom is barely over one percent and thus average percentage movements the stock market is used to. This makes it easy to state there is no chance we are anywhere near a bubble right now as we get these miniature gains. The 1980 blow off top had many days where the average up and down movement was over seven percent and we are a long ways away from having that kind of market volatility now. It will come, but for now it is stair stepping higher.