MARKET CALL: Slow-Mo Meltup Fueled By Less Uncertainty

The fireworks started early in the stock market last week. On Thursday, the day before Independence Day, both the S&P 500 and the Nasdaq rose to new record highs (chart). In addition, their 50-day moving averages rose above their 200-day moving averages. Those "golden crosses" tend to be bullish breakout patterns, indicating the possibility of a long-term bull market.

The unprecedentedly fast rebound in the stock market since April 8 is attributable to less uncertainty. The S&P 500 volatility index (VIX) peaked at 52.3 on April 8 (chart). On Thursday, it was back down to 17.5, below its average over time of 19.5. We wouldn’t be surprised to see it fall to 10.0 over the rest of the summer. That's because the rapidly rising uncertainties on a number of fronts that caused the stock market correction from February 19 through April 8 have been rapidly abating since then.