Apple May Have Sparked A Huge Rally

The market busted higher yesterday. Volume ramped as the bulls scorched the bears and regained 1374. Our leadership groups posted good gains too.
 
The technology sector was the notable winner. After Apple (Nasdaq: AAPL) ripped 9% higher the Nasdaq followed suit. The index finished 2.3% higher and remains 3% below its previous rally high. Small caps also had a big day. The Russell 2000 ripped 1.7% higher, which put the index 4% below its rally high. The remaining leadership group, banks, could only muster a .86% climb.
 
Still, it was a good day for bulls who had to overcome dire economic news. Not only did the United Kingdom enter a recession (Spain entered recession again on Monday), but durable goods orders in the U.S. plummeted. U.S. durable goods for March fell 4.2%, which was way below the 1.7% estimate.
 
News about the economy was grim yesterday, but the indices managed to push higher. That bullish momentum is a great sign. And it should propel the indices to new highs over the coming weeks so long as Tuesday's low price holds.
 
Traders have to think that if two recession confirmations and a big economic miss won't rock the bulls' boat, then nothing will. Although we should expect a little profit taking today.
 
On Friday, U.S. GDP estimates are released for the first quarter. Experts anticipate 2.5% growth. That would be a decline from 3% last time.
 
A big miss would have Bennie and the Feds in a bind because they do not want to embark on QE3 in an election year. Yet, should the economy show weakness on Friday, unemployment will creep up too and QE3 may not be far behind.
 
Overnight, the Asian indices were mostly higher by modest amounts. The opposite was true in Europe where the indices are mostly lower by modest amounts.
 
If the bulls are poised to build a rally they would likely hold 1380 today. I would also like to see a late-day push that takes SPX above 1391 and keeps it there into the close. Banks lagged yesterday while other indices raced higher. Banks would likely be green most of today if a big rally is about to unfold.