U.S. markets opened higher and drifted higher throughout the morning while holding momentum into the closing bell.

The extended rally was broad-based as the major indexes extended their winning streaks while pushing early March and April highs.

The S&P 500 rose 0.7% after testing a high of 2,726 while clearing and holding 2,700 for the first time since mid-April.

The Dow climbed 0.8% after reaching a peak of 24,794 to extend its winning streak to 6-straight sessions.

The Nasdaq gained 0.9% to extend its win streak to 5-straight after making a run to 7,414 to clear the 7,400 level for the first time since late March.

The Russell 2000 was up 0.5% after trading to a high of 1,609 while clearing and holding the 1,600 level for the first time since March 12th.

The Russell 2000 came within 6 points of clearing its all-time high of 1,615 from late January. The other major indexes are further away from setting lifetime highs but the action in the small-caps is very bullish for the rest of the overall market.

Utilities rose 1.4% and showed the most strength while Health Care and Technology rallied 1.1%. There were no sector laggards.

Global Economy – European markets were mixed as the formation of a populist government in Italy moves closer to fruition and flat action from the Bank of England.

Germany’s DAX 30 advanced 0.6% and UK’s FTSE 100 rose 0.5%. France’s CAC 40 added 0.2%. The Belgium20 slipped 0.2 % and the Stoxx 600 Europe dipped 0.1%.

The Bank of England maintained its Bank Rate at 0.5% and left its corporate bond purchase and government bond purchase plans unchanged.

UK March Industrial Production rose 0.1%, weaker than expectations of 0.2%. March manufacturing production fell 0.1%, better than expectations for a decline of 0.2%.

Asian markets settled higher across the board. Hong Kong’s Hang Seng soared 0.9% and South Korea’s Kospi jumped 0.8%.

China’s Shanghai was higher by 0.5% while Japan’s Nikkei rose 0.4%. Australia’s S&P/ASX 200 climbed 0.2%.

China April CPI rose 3.4% year-over-year, matching expectations. April PPI rose 1.8% year-over-year, weaker than forecasts of 1.9%.

The Japan April eco watchers survey outlook was up 0.5 to 50.1, stronger than expectations for a gain of 0.3 to 49.9. The April eco watchers current survey rose 0.1 to 49.0, matching forecasts.

The Consumer Price Index rose 0.2% in April, below expectations for the inflation measure to have climbed 0.3% from a month earlier. The core CPI, excluding food and energy, was up 0.1% month-over-month, below the 0.2% increase that had been expected.

The 12-month pace sped up to 2.5% year-over-year versus 2.4%, while the core was steady at 2.1%.

Initial jobless claims were unchanged at 211,000 for the week ending May 5th, missing expectations for a print of 220,000. The 4-week moving average fell to 216,000 from 221.500.

Continuing claims bounced 30,000 to 1,790,000 in the April 28th week after dropping 74,000 to 1,760,000 in the prior week.

The Treasury reported a $214 billion budget surplus for April, topping expectations of $88 billion and a new record.

Market Sentiment – The iShares 20+ Year Treasury Bond ETF (TLT) snapped a three-session losing streak after trading to a high of $118.98.

Fresh resistance is at $119-$119.25 and the 50-day moving average with a close above the latter being a slightly bullish signal. Support remains at $118-$117.75.

Market Analysis – The Spiders Dow Jones Industrial Average ETF (DIA) closed higher for the 4th time in five sessions while testing an intraday high of $248.11.

Near-term resistance is at $248.50-$249 held with continued closes above $250 signaling continued momentum. Rising support is at $246.50-$246.

RSI is in a nice uptrend with late February resistance at 60 in play. Continued closes above this level would be a bullish development for a possible run towards 70.

This area served as major support from December through January. Current support is at 55-50.

The Energy Select Sector Spider (XLE) closed higher for a second-straight session after pushing a peak of $76.80. Near-term resistance at $76.75-$77 held with continued closes above the latter leading to a run towards $78 and January highs.

The breakout of the recent 3-week trading range was a bullish signal. Rising support is at $76-$75.50.

RSI has cleared April resistance at 70 and held as support through late January.

Continued closes above this level could lead to a possible run towards 80. Support is 65-60.

All the best,