Market Rally Sustainable?

The stock market passed another benchmark on the road to recovery yesterday. The S&P 500 rose to 1109, clearing 1100 for the first time since the market crashed last Fall. At the same time, my FOX INDEX has reached its new high for 2009 [chart]. The INDEX measures as a percentage the distance traveled from the market’s March 9 bottom; while also marking the distance remaining to its pre-crash healthy level (12,000 Dow, 1,300 S&P, 2,500 NASDAQ). As of today, the distance traveled from the bottom to healthy has covered 71.5% of the full path.

It’s a strange market, though. It’s going up on the dollar’s weakness, partly because a weak dollar means stronger commodity prices. Eventually, dollar weakness will hurt the market. Volume is low, suggesting “money shifting from strong hands to weak hands.” A “correction” (decline) seems near.