Welcome to the third straight day of a triple-digit Dow gain. The DOW jumped 142 points higher today while the S&P 500 (+12 points) and NASDAQ (+29 points) hit new all-time highs today to close at 2328 and 5763 respectively. The value of the S&P 500 is now over $20 trillion for the first time ever.

The gains were basically all concentrated in the DOW financial components with GS and JPM at new highs and the industrial components BA, CAT, 3M and UTX helping as well. These advances contributed almost all of the gains in the DOW. On the other hand, telecom lagged as VZ announced further price concessions on its wireless service. AAPL is at almost its highest level ever and AMZN was back at that 840 and over resistance level after its ostensibly disappointing earnings report two weeks.

Breadth numbers were positive at an 18/13 upside ratio. The VIX gapped open higher along with the indices and actually has the nerve to be at 11.16 for a gain of .31 and this type of price action is consistent with a lower market rather than a higher one. Why this is taking place does prove my contention that the VIX cannot decline below 10 because if the past two days cannot get it lower, then I do not know what will. One can also be positive about this strange situation in the sense that the further the VIX does go from its ultimate downside support at 10 means that the market still has further room to run to the upside even from these elevated levels, believe it or not.

In a sense these advances are astounding as they are based on nothing more than the fact that investors are believing that the administration’s tax cuts are going to be “phenomenal” as the president said last week. But since he says everything involved with him is of this nature, even his daughter’s clothing line which got booted out of Nordstrom’s and the online sites from Nieman Marcus and Sears, but never mind. Investors are also saying that his infrastructure plan is going to be a big success as well even though we have not heard a word about the specifics, but hey – up in the market is better than down. This could also be a function of the fact that perhaps earnings for the first-quarter of 2017 are going to be better than the current projection for an advance of over 10%.

Economic reports this week will see: Tuesday – January P.P.I. and Congressional testimony of Fed Chair Janet Yellen; Wednesday – January C.P.I., plus January retail sales, industrial production and capacity utilization, February Empire State NY Index; Thursday – weekly jobless claims, January housing starts and building permits plus February Philadelphia Fed Activity Index; Friday – January L.E.I.

The most important would appear to be Chair Yellen’s take on the state of the economy and the potential for a March rate hike, which investors assign only a 32% probability at the present time, and the retail sales figure on Wednesday.

Donald M. Selkin

These are excerpts from Don Selkin’s Daily Market Notes, abbreviated and updated with permission from the author. Don Selkin is the Chief Market Strategist at Newbridge Securities Corporation, member FINRA/SIPC and provides the Fair Value analysis for CNBC each morning.  The commentary provided in this Market Letter is intended to provide timely market analysis and should not be considered a research report.  This Market Letter may contain, and is limited to: Discussions of broad based indices; Commentaries on economic, political or market conditions; Technical analyses concerning the demand and supply for a sector, index or industry based in trading volume and price; Statistical summaries of multiple companies’ financial data, including listings of current ratings; and, Recommendations regarding increasing or decreasing holdings in particular industries or securities.  This Market Letter does not make a financial or investment recommendation or otherwise promotes a product or service of the firm.   This Market Letter contains only news, facts, and commentary on information previously reported from a news source believed to be accurate and reliable by the author.  These news sources include the following: Bloomberg Financial, Reuters, and the Associated Press.