Bulls have regained their footing and recruited some reinforcements, as the S&P 500 on Wednesday powered right through its 5.5-year intraday high of 1576 on increased trading volume to set a new record of 1589. Read more about Sector Detector: Bulls reclaim their mojo as Healthcare leads

This week began on the same negative tone that last week ended on. There were no economic reports today, but an unexpected European problem surfaced as the Constitutional Court in Portugal ruled out a number of austerity measures that the Portuguese administration had implemented, pursuant to the requirements of the ECC, IMF and EC.  This creates a dilemma for both Portugal and the troika.  Read more about What the Market Wants: What Will First Quarter Earnings Bring

“Better three hours too soon than a minute too late.” -- William Shakespeare

In spite of the fact that the market has been hitting record highs recently, the deep disconnect between Main Street and Wall Street, accelerated by the budget cuts known as the sequester, will likely cause the Bulls to retreat in a serious way within the next couple of earnings seasons. Read more about ETF Periscope: Sequester Will Slam Brakes On Any Momentum Economy Might Have Left

Last week, I talked about the impressive strength this year in the Dow Jones Transportation Average, but it since has been hit by investors’ renewed worries about global economic growth and financial stability. Its fall has been led by weakness in the airlines. Read more about Sector Detector: Skittishness neutralizes bullish conviction

With European markets closed for Easter on Monday and Asia soured by poor economic reports from both China and Japan, it was up to the domestic ISM report and the Construction Spending reports to give the market a boost. Read more about What the Market Wants: ISM Leads Market Down Bearish Path

“Nothing like a little judicious levity.”-- Robert Louis Stevenson

A few weeks back, when word hit Wall Street that the Cyprus government planned to impose an across-the-board tax on the depositors of its two biggest banks, the major indices fell sharply and quickly. Read more about ETF Periscope: Warning Bells On Cypress Continue to Toll for Investors

The Dow Jones Transportation Index is up an impressive +16.7% year-to-date through Wednesday, as it runs interference for the broader Dow Industrials (up +10.8%) and tries to prod the bulls ahead. Read more about Sector Detector: Transports try to prod bulls through tough resistance

The week started out well as insured depositors were spared in Cyprus, and that resonated well with investors.  Furthermore, last week’s domestic economic data was quite positive especially for housing.  The Philadelphia Fed Survey was much better than expected; Initial Jobless Claims remained in the low 300K area; and LEI were as expected. Read more about What the Market Wants: Recapitalization Scenarios

“Mastering others is strength. Mastering yourself is true power.”  -- Lao Tzu

However the banking debacle in Cyprus plays out over the next few days and weeks, it should serve as a reminder that, economically speaking, much of Europe remains on shaky ground. Read more about Go Long Apple, Short the Eurozone

Well, you gotta hand it to the bears; they are pulling out all stops in their effort to derail the bull train, just as the S&P 500 tries to eclipse its all-time high. This time they trotted out the tiny republic of Cyprus (pop. 1.1 million) and its battle with the EU over the terms of its financial bailout. Steal a big chunk of depositors’ accounts? Read more about Sector Detector: Bears trot out Cyprus in vain attempt to derail bulls