Last week, the SPDR S&P 500 ETF (NYSEARCA:SPY) had a potentially very bullish signal occur. It saw its MACD histogram on a weekly chart move above the 0 line. The previous two times the oscillator rose above this level, it turned out to be a very bullish indicator. I asked a few weeks ago if the internals were predicting a move to new highs, and I still think that's the case. The MACD signal does nothing to change my bullish views.

I view this as further confirmation that the surprise summer rally that very few were expecting still has legs. Within two days of the June 4 bottom, I asked if we had hit a major low. After the price action improved by mid-June, I discussed the stars aligning for a summertime rally. We've been bullish on the market since then, and things aren't changing.

There's still too much skepticism in the face of strong price action. We'll have pullbacks and scary headlines out of Europe, but the important thing to remember is all of that is already priced into things. The market moves on expectations, and we think they are still too low.