As it turns out, the bulls weren't done buying stocks after all. The lull from a couple weeks ago was just that...a lull, which turned out to be temporary.

Last week's 1.8% gain for the S&P 500 (SPX) (SPY) rekindled the rally that began in early February.  We've now logged gains in six of the past seven weeks, wiping away the bearish worry that materialized two weeks ago when the winning streak came to a close. In fact, Friday's close of 2072.78 for the S&P 500 is the best weekly close we've seen since early December, and better yet, the move has put stocks within reach of a huge technical ceiling. If broken, it could start something of a melt-up.

If we'll take a closer look at the technicals below - as always - after a quick run-down of last week's and this week's key economic data.

Economic Data

Last week was loaded with economic news, but there's little doubt as to the highlight - Friday's job report for March. In short, the nation added 215,000 new payrolls last month, and the unemployment rate ticked 1/10th of a point higher to 5.0%. 

Unemployment and Payroll-Growth Chart

Source: Thomson Reuters

While the slightly-higher unemployment rate raises a red flag, there's actually a compelling explanation. In simplest terms, the unemployment rate is determined by dividing the number of officially-unemployed individuals by the number of people technically in the work force (whether they're working or not).Although the nation added 215,000 new payrolls in March, even more people saw enough a reason to put themselves back in the pool of job-seekers. From many perspectives, it's encouraging that more individuals are getting off the sidelines and at least trying to get back to work.

This progress is better illustrated using a chart of lesser-watched data -- the labor force participation rate, and the employed/population ratio. Both not only moved to multi-year highs last month, but both are accelerating higher.

Labor-Force Participation and Employment/Population Ratio Chart

Source: Thomson Reuters

What's still missing from the employment picture is strong wage growth and an increase in the number of hours worked per week.If the other employment trends remain intact, however, wages and hours-worked should eventually follow suit.

Another item of interest from last week was an update on consumer sentiment. It's interesting, because the broad deterioration of consumer confidence wasn't halted even though the stock market was firmly up for March. The Conference Board's consumer confidence reading ebbed a little higher, from 94.0 to 96.2, but is still trending lower.Meanwhile, the Michigan Consumer Sentiment Index move lower for a third straight month, from 91.7 to 91.0. That move prolongs a downtrend that actually began in early 2015.

Consumer Sentiment Chart

Source: Thomson Reuters

This lack of confidence could still present a headwind for stocks.

Everything else is on the grid below:

Economic Calendar

Source: Briefing.com

This week is going to be considerably less busy. The only items we're interested in are Wednesday's FOMC minutes (from the Fed's previous meeting), and Tuesday's ISM Services Index report. The ISM index for the manufacturing industry perked up last week to close back above the critical 50.0 level, and the ISM Services Index - already above 50.0 - is projected to move a little higher as well. Strong readings there could be a deciding factor in whether or not the bulls are going to commit to the current rally.

ISM Chart

Source: Thomson Reuters

Stock Market Index Analysis

As incredible as it seems, the S&Pis now up 13.3% from the lowest close ofmid-February. Last week's gain quelled a slight pullback from two weeks ago before it could turn into something worse. The end result (aside from the incredible gain in just seven weeks) is an index that's well above all of its key moving average lines... including the key 200-day moving average line (green, on our chart below). In fact, the last remaining hurdle is on the verge of being hurdled. That's the 2078 mark, where the upper Bollinger band currently lies, and where the index hit a ceiling a couple of times late last year.

S&P 500 & VIX Daily Chart

Chart created with TradeStation

Underscoring this strength is the fact that the CBOE Volatility Index (VIX) (VXX) has finally edged under a key support level around 13.3. And, the Percent R indicator has more than confirmed the market's bullishness.... several times, actually.

The volume is the one weak spot -- it could be (and arguably should be) stronger. Nevertheless, as was discussed on the BigTrends website late last week , this rally does have enough bullish breadth and depth to it as is.

We still can't dismiss the possibility of a bearish pushback. However, as long as the 20-day moving average line (blue) at 2030 and/or the 200-day moving average line currently at 2016 hold up as a floor, the uptrend will technically remain intact.

The daily chart of the NASDAQ Composite (COMP) looks about the same, though the composite only firmly hurdled its 200-day moving average line (green) at 4861 on Friday, closing at 4914. Still, it's a victory, as is the Nasdaq Volatility Index (VXN)'s break below a floor at 16.5.

NASDAQ Composite & VXN Daily Chart

Chart created with TradeStation

Zooming out to a weekly chart of the S&P 500 we can see a slightly more bullish perspective on the current rally effort. On a weekly open/close basis, the S&P 500 has already pierced an important resistance level that extends back to the middle of 2015. If that's the important breakout, then the index could have a rather unfettered path back to the 2135 area where the index topped out last year. It's likely the upper 26-week Bollinger band will be around that level too, by the time it could be tested

S&P 500 & VIX Weekly Chart

Chart created with TradeStation

On the flipside, the weekly VIX doesn't have a great deal of room to move lower... certainly not enough to allow the S&P 500 enough room to test 2135.

As of Friday, the BigTrends TrendScore for stocks stood at 91.7 (out of 100), which is well into bullish territory. That reading jibes with the mostly-bullish shape of the charts. We'll side with the momentum for now, though we'll keep that optimism on a short leash. The red warnings flags will be breaks below the recently-crossed moving average lines, particularly for the S&P 500. 

Waning On Auto Sales?

In January of this year, the notion that the automobile manufacturer industry had already seen its cyclical peak was first floated. Those observers may have been more right than they knew, or wish they were.

The chart below tells the story. Though March itself was a decent month for most U.S. auto manufacturers, the broad sales pace of vehicles is clearly slowing down (with or without light trucks).

U.S. Vehicle Sales Chart

Source: Thomson Reuters

It's not a slow-down in production, either. As the lowest segment of the chart illustrates, production of vehicles has been relatively steady or the past four years.

This isn't a conclusive red flag. But, it's still a concerning turn of events that may merit caution with automobile-related stocks.