General markets rose on mixed volume. That said, the S&P 500 has had an 8 day winning streak, it's longest in over eight years. The small cap weighted Russell 2000 continues to outperform the other major indices as investors are willing to take on more risk with quantitative easing firing on all cylinders, the Fiscal Cliff tax issue behind us, and AAPL weighing down the NASDAQ Composite and NASDAQ-100 indices.

In economic news, new home sales in December were weaker than expected as estimates ranged from 375,000 to 406,000, but the figure came in at 369,000. Housing stocks were still able to rally. And bullish comments by ECB chief Mario Draghi and reports on strong German business sentiment and eurozone business activity added to the overall bullish tone.

It is of note that the markets have been able to shrug off bad news from a weak Apple (AAPL) earnings report and the new home sales miss. As with all things, news is contextual so a market that shrugs off bad news indicates a market with resilience and strength. The converse also applies.

NYSE short interest ratio was 18.36. This means it would take the equivalent of 18 days' average volume to cover all NYSE short positions. At extremes, this is a contrarian indicator, meaning that the more bearish short sellers become, the greater the odds of the market continuing higher. If the uptrend continues, more bears will cover their short positions which will further add to the strength of the uptrend.

The shortable gap-down move in AAPL remains in force per our discussion in last Thursday's Pre-Market Pulse, using the 465.73 intra-day high of the gap-down day on Thursday as an upside guide for a stop. It is interesting that AAPL has remained a viable short-sale target even in the midst of a strong general market rally given that short-selling is generally not an optimal activity in bull or rally phases. AAPL remains a fascinating exception and textbook example of how a beloved, "bullet-proof" leader can lose its luster at exactly the point when the crowd is unanimously in love with the stock and all the news is as rosy as can be.

Despite the extended condition of the indexes, investors should focus on individual stocks as they come into proper buy points since these become actionable regardless of the position of the indexes. Conversely, on any market pullback, which would not be surprising given the extended position of the indexes currently, investors should simply focus on their stocks and associated stop-out levels if and as they pull back with the market.