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This year we really have to tip our cap to the institutional money that moves markets. So far during the summer of 2010 the major stock market indexes have rallied before every major holiday. If you look at a chart of the S&P 500 Index beginning around late May you will notice that the markets found a low on May 25th, and rallied into the Memorial Day holiday which was celebrated on May 31st. This was a period when traders and investors were very fearful because of the flash crash that occurred on May 6th. Again, the institutional money rallied it higher before the first major holiday of the summer when the U.S. consumer plans vacations and events to start the summer. This is simply when the U.S. consumer will spend money.

In 2006 and 2007 the stock market saw a lot of merger and acquisition activity. In fact, that was the catalyst for the stock market advance throughout 2006 and it helped support and recover the markets three times in 2007 despite the brewing mortgage crisis. Here we go again in 2010 as the merger and acquisition activity heats up. Hewlett Packard Co (NYSE:HPQ) just won a bidding war for 3 PAR Inc (NYSE:PAR) over Dell Inc (NASDAQ:DELL) today. It is important to realize that Dell Inc started the bidding at $16.00 when the 3 PAR Inc stock was trading under $10.00 a share. Hewlett Packard Inc is now paying $33.00 a share for the stock. That is move of more than two hundred percent in 3PAR stock since August 16th, 2010.

Yesterday the major stock market indexes surged higher on the back of positive Chinese data, a positive ISM Index in the U.S., and a severe decline in the U.S. Dollar Index. This sharp reaction higher in the stock market obviously caught many short traders and investors off guard in the short term. Recently many talking heads in the media had been talking about the bearish Hindenberg Omen. This bearish technical and fundamental setup was actually featured on the Yahoo homepage and also on many local news channels that never feature the stock markets. While the markets could still decline it will rarely do so when the public knows about it. The stock market is just not that easy. Remember if it was everyone would do it. Don't you all remember the 1920's or the so called 'roaring twenty's. What about the more recent 1990's? The tech bubble or the dot com bubble are historic events that will be read by many generations of people to come.

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SOURCE: http://stocks-intraday.blogspot.com/

The markets surged higher today and right into a major resistance area.  As seen on the chart below, the SPDR S&P 500 ETF (NYSE:SPY) has gone directly into the 20 and 50 moving averages on the daily chart. This acts as a major resistance point in the short term and should keep the markets flat tomorrow if not with a small pull back. Friday the Unemployment and Non Farm Payrolls will be out at 8:30am ET. This should cause some wildness for the first few hours until the holiday kicks in and volume dries up.

The dollar, PowerShares DB US Dollar Index Bullish (NYSE:UUP) is getting pounded today. The market seems to think more Federal Reserve easing is coming down the pipe.  They are most likely right.

The United States Oil Fund LP (ETF) (NYSE:USO) is surging today, erasing yesterdays decline as the China PMI numbers show China is expanding once again, though at a slower pace. The drop in the dollar also helps push oil higher.

Over the past few days, I wrote many articles discussing major levels hit by key stocks as well as far too much bearish sentiment in the market. Prior to a holiday weekend, I thought it was highly unlikely we would see a major break down and would even possibly see a rally. With a huge rally today, this turned out to be dead on. Understanding market psychology has become more and more important in these markets. Learn this and more in the Research Center.

The SPDR S&P 500 ETF (NYSE:SPY) is soaring at the highs of the day higher by $3.03 to $108.34. This is truly a move for the ages off of the China PMI numbers ADP Employment data and the ISM economic data. China PMI and ADP Employment data were not great but at this stage the market breathed a sigh of relief that they were not worse. Then, the ISM data was posted at 10:00am ET and causes a major squeeze as it came in far better than expected.