Stock indexes regained the ground lost yesterday, with analysts attributing the gain to the earlier drop in oil futures. Oil futures did erase a big gain from the morning, but they were able to rally well off the lows to close almost unchanged. The rally of oil off the lows late in the oil session did little to dampen the enthusiasm for stocks. Analysts probably couldn’t explain the market today so it was just easier to attribute the price action to some other market. The very bearish failure from yesterday didn’t attract much selling, even near the open when oil futures were well up for the day. It is usually a bullish sign when the market ignore a very obvious bearish set-up. It will be interesting to see if the market can follow-through to the upside on Friday, or if we get back into the pattern of direction changes every other day. Trends and momentum remain up. Some momentum indicators started to roll over yesterday, but not convincingly and no where near from an overbought area. I was ready for a sell-off today, but it was clear from the open that this market wasn’t ready to go down. Maybe I’ve been too cautious and looking for any reason to get short. I’m still cautious and not convinced that this rally has much further to go without a re-test of the downside. I also don’t want to fight the uptrend. I wish I had more conviction one way or the other. With the failure to follow through on the downside of a bearish set-up, the logical path would be for the market to put in a good upleg here. But this market has a way lately of defying technical patterns. If this market is to make a clear break to the upside, there should be some decent volume to confirm the enthusiasm.