What’s more, the Master Key’s overly bullish stance is supported by several outlying technical indicators. For more weeks than I care to count (over 52 at least), specialist shorting has stayed stuck at historically low levels. If we didn’t know better, we would think the market specialists had lost the short selling instruction book. But that’s being glib. These guys, to a man, could write the book in their sleep. Clearly, there are just no sellers in this market to drive prices down.

As a rule, you can judge the strength of a market by how well it reacts to bad news. Last week, the S&P 500 backed off 1% in response to the discovery of a terrorist plot based in London, the on-going violence in Lebanon, and the closure of Prudhoe Bay’s oil field. Under the circumstances, we think the market held up quite well – a little like Atlas, shouldering the weight of the world’s worst problems without collapsing.

Of course, this should not surprise you. For some time, our technical indicators have been remarkably positive. Relative strength in the broad market remains good. Speculation remains low, suggesting a lot of cash on the sidelines waiting for the right opportunity. And specialist shorting still lurks at historic lows.

In fact, even when the market rallies these days, the market specialists do very little shorting – a further sign that the specialists see no sell orders on their books. And without sellers, the buyers are in charge. So it’s no wonder the market stays buoyant.