What Moves This Market?

This is a really critical question right now. Until about a week ago, it was a pure technical market. It ran for six weeks above 13 day moving average, then all three major indices, Dow Jones, S&P 500 and Nasdaq Composite dipped under MA 13. Then we had a week of divergence. When Dow essentially moved sideways, S&P and Naz resumed their march over MA 13. Which kinda invalidated my idea that party is over posted here. Let do a quick review.

Technicals

Dow Jones is over 50 days moving average, over 8000, and broke over downward trendline it had since November. S&P is also over MA 50, but failed to breach 875 line so far. Naz is screaming! It's only 90 points under 200 day moving average and at the high for the year. All technicals are extremely bullish, with one exception: market is extremely overbought. But it was overbought for the last seven weeks.

Sentiment

Sentiment is amazing. Despite huge bull run, it's mostly bearish, sometimes getting neutral for couple of days. Of course, I might be wrong, I'm using completely unscientific method: just count bullish and bearish commentators on CNBC when I watch it and several web sites. Anyway, if somebody can point me to bullish sentiment counts, I'm ready to recognize my mistake.

Fundamentals

Not much changes in fundamentals. Yes, a lot of companies managed to beat very low estimates and shot up like crazy. But earnings are weak, economy is in a weak shape, the only good news is that US consumer is alive and kicking. Fed is struggling to contain possible deflation, results are unclear so far.

I don't like the conclusion I'm about to make: outlook is bullish. I just have to make it, because technicals are bullish and sentiment is bullish as well (market climbs the wall of worry). Fundamentals are bearish, but for the last several months market didn't care about fundamentals. There are couple of things which can change the picture. First of all, this is the end of the month and there is a possibility of window dressing, although this is not the end of the quarter. Second, a lot depends on government, and it was quite unpredictable. I don't know if I want to commit more money on the long side right now, although tech and, surprisingly, REITs look quite tempting.