Bulls finally got the rally that they were hoping for throughout May, after a three-week long grinding correction that tested the nerves of investors on Wall Street. The Gorilla remained confident all the way, as market internals signaled an orderly consolidation, and now it looks as though his patience will finally pay off. Bulls hope that last week’s strength is here to stay and that the major indices will now hit new all-time highs. Stocks on average are exactly where they were at the end of 2014, so the Gorilla thinks it’s just about time for the next leg up in this historic bull market.

A lot of traders might have missed the best thing that happened to the market recently. No, it’s not the resilience of the labor market, not even the welcome normalization of energy prices. The Gorilla thinks that the bullish price action in the face of the looming Fed rate hike in June is what investors should be really happy about. This points to a fundamental change on Wall Street—the possible end of the “good news is bad news” era. It seems that stocks might be headed for new highs as the Fed is tightening monetary conditions. This week’s non-farm payrolls number could be a great test of this new behavior, especially if traders see a “blow-out” report this time around.

The technical picture improved significantly as the price action caught up to the “under the hood” strength that the Gorilla observed in the last couple of weeks. All three of the major indices are now above their respective 50-day and the 200-day moving averages, as the Nasdaq finally joined the Dow and the S&P 500 in the bullish camp. The tech benchmark also provided a strong technical signal, the golden cross, when the short-term average crossed above the long-term one last week. The same signal occurred in the case of the Russell 2000, which means that all of the indices that the Gorilla tracks are firmly in bull markets.

Market internals improved in line with the price action, as more and more stocks are joining the rally. The Advance/Decline line hit another new high as advancing stocks outweighed declining issues by a 5-to-1 ratio on the NYSE and by a 6-to-1 ratio on the Nasdaq. The daily number of new 52-week highs was 95 issues on the NYSE, while it jumped to 85 on the Nasdaq, with still only 10 and 16 stocks hitting new lows on the NYSE and the Nasdaq respectively. The relative strength of small caps is certainly helping the “breadth” of the advance. The ratio of stocks above the 200-day MA surged by ten percentage points to 65%, further boosting the confidence of bulls.

The list of the most shorted stocks on the NYSE and the Nasdaq changed significantly in the last few weeks. Energy stocks benefited from the sustained rally in the price of oil while new companies showed up on the list from various segments. Beaten down restaurant chain Shake Shack (SHAK) with a short interest of 40%, and online loan provider Lending Tree (TREE), with a short interest of 45%, are among the newcomers. Square (SQ) and Pure Storage (PSTG) are still on the top of the list with short interest above 72% each! The day-to-cover ratio (DTC) of the hotel chain Marriott (WU) jumped to 17 recently, as the price of the shares slid from $80 to $65 since early 2015. The high DTC ratio means that shorts could find it hard to exit their positions, should the firm’s fundamentals improve.

A long forgotten topic surfaced last week, when Greece received another round of bailout funds from the ECB, to pay off some $7.5 billion of debt from previous bailouts. The proverbial “can-kicking” gave a boost to European stocks, and in turn, to the already bullish U.S. market. Domestic stocks turned higher recently, as investors bet on a much better second quarter regarding earnings and GDP-growth, following a steep decline in profits, and a minuscule 0.8% expansion of the economy in the first quarter of 2016. The Gorilla thinks that stocks might shine this summer as traders are focusing more on real fundamentals and less on central bank policies. Stay tuned for an eventful week, and an always crazy Jobs Friday!