DOW AND S&P 500 CLEAR 50-DAY LINES -- SMALL CAPS HAVE A STRONG DAY -- FALLING VIX ALSO SUPPORTS HIGHER STOCK PRICES

DOW AND S&P 500 CLEAR 50-DAY LINES...Stocks spent Monday extending the rebound that started two months ago.   And they continue to overcome some overhead resistance barriers.  Chart 1 shows the Dow Industrials trading back above its 50-average for the first time since February.  While Chart 2 shows the S&P 500 trading above its 50-day average and touching the highest level since early March.   It's also trading above its late-February low at 2855.   That increases the odds for a possible move up to its 200-day moving average.  Chart 3 shows the Nasdaq Composite moving further above its 200-day line.   All eleven stock sectors are gaining ground.  A rebound in bond yields is helping make financials the day's strongest sector.     For the first time in awhile, small caps gained ground on large cap stocks.

SMALL CAPS HAVE A STRONG DAY...Small caps did even better than large caps.  Chart 4 shows the Russell 2000 iShares (IWM) rising 4% today which is twice as much as larger stocks.  The chart also shows the small cap index trading above its 50-day average and reaching the highest level since early March.  The IWM/$SPX ratio in the lower box may be bottoming as well.  That suggests some bargain-hunting in domestically-oriented smaller stocks.

FALLING VIX ALSO SUPPORTS HIGHER STOCK PRICES...Chart 5 shows the CBOE Volatility (VIX) Index falling today to the lowest level in nearly two months.   That's also helping to support higher stock prices.