After a very good week for S&P we continue to be bullish, we expect it to test its year high within next 4 weeks. We list below the short term bullish factors together with some threats:

PROS:

• The lower band trend-line is a good support since march lows and despite it tried to break and stay below it, then it turned above it.
• Friday trading session was mixed, but the market defended its positive gains despite poor unemployment reading, a sign that recovery will not rely too much on consumer spending.
• Euro spiked Vs dollar, we are entering a week with major US treasuries auctions and we expect USD to be weaker, above 1.50.
• VIX future, despite it went crazy one week ago with a 25% spike, it bounced back to its two week low.
• G20 leaders agreed on Saturday it is too early to exit from quantitative easing. There were concerns in the market about early signs of exit strategy and investors rushed to profit from their longs before it was too late.

CONS:

• Mixed signals from crude oil, a significant rally in oil price could be a major threat for recovery.
• Trading volume are very low especially during positive sessions.
• Year end is near, many investors will "lock in" their gains after a positive year and will take some risk off the table.
• Gold is rising, appetite for this commodity is strong again. Is this a sign of trouble time around the corner? Investors are highly emotional in uncertain times, will gold make flows to shift from equities into it?

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