Technical indicators are red hot for Stocks.  The question is….can prices continue to make solid progress despite growing problems on the economic front?

The technical picture for Stocks has strengthened this week as the DJIA breached noteworthy resistance levels in the area of 12,650.  The Nasdaq and S&P also have taken on more substantially positive technical indicators.  This is in the face of last week’s economic reports, which on balance, depicted weakness on a number of fronts.  However, some key earnings numbers did managed to come in less negative than expectations.  A noteworthy global problem that is beginning to take its toll on poorer nations is the price and scarcity of food.  This problem will hit the major industrialized nations in the form of higher prices, especially for restaurants and prepared foods, which could be dramatic given the dependency on service employment in the US.

So, despite the growing negatives, can price levels of the major Indexes continue to appreciation as technical indicators allude to?  The answer is yes, because over the short run, price appreciations can ignore long term economic problems.  The key however is…what does the long term outlook hold for stocks?  The answer…probably another wave of significant price depreciations.