In my last update for this column I focused on the new rule change and how it was likely to throw gas on the fire of the rally. That was April 14th and the S&P 500 closed that day at 841.50.

Today the S&P 500 closed at 932.68.

It seems that everyone and his brother, uncle, postman, next door neighbor and distant cousin was talking about the head and shoulders pattern that developed of the past several weeks.

That pattern has now failed. This market is going higher.

You are going to continue to see earnings "surprises" to the upside (courtesy of the FASB rule change) that will power this market higher.

It does not matter that those earnings "surprises" are based upon accounting shenanigans. The push is on to make it appear that we are in a recovery. The fact that the recovery is based upon smoke, mirrors, and a giant dose of accounting magic is not visible to the masses.

In time, it will become visible as the alleged "recovery" fails to produce new jobs, fails to deliver organic, private sector increases in consumer spending, and fails to stop the real estate crisis.

But for now, the theme of the economy is "recovery."

It's too early to be looking for evidence that the "recovery" has failed to materialize. The massive $1 trillion+ programs by the Federal Reserve in addition to the recent game-changing FASB "mark-to-model" rule will provide the appearance of a recovery.

In time, that appearance will be recognized as false.

All in due time.

But for now, look for the market to continue its push higher.  Back in March I gave targets for this rally, and I see no reason to abandon them at this point.

Look out above!