Even IBM got in gear with yesterday’s strong rally, registering its first gain in fifteen trading sessions. You may recall that it was Big Blue that stoked the broad market’s decline a week ago, when Q1 earnings came in a nickel below expectations. When the news hit the tape after the close, investors wasted little time dumping not only IBM shares but nearly everything else. In retrospect it’s clear they needn’t have panicked, since a multitude of other companies have announced quite respectable earnings since.

Yesterday’s corporate news was particularly pleasant, including as it did strong quarterly numbers from UPS, Motorola and Nokia. Altria, a Dow component, leaped 3 percent, not just because earnings the day before had beat estimates, but also because of news that the company’s Philip Morris unit is close to a deal with the Chinese that would allow Marlboro cigarettes to be made and sold there. Tobacco usage is no longer growing in the U.S., but China, which already consumes a third of the world’s smokes, is viewed as a market with huge untapped potential (read: virgin lungs).

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From a technical standpoint, though, Thursday’s rally did not sound an all-clear signal for bulls. In fact, it left much to be desired, since a few broad-based indexes still lag the S&P 500 by a wide margin. Although the S&P 500 cash index popped above its 200 day moving average to close on the high of the day, the Dow Industrials ended the session well below that benchmark (illustrated above), as did the Nasdaq Composite. Relative to some key hidden pivots, it would take a rally almost two-and-a-half times the magnitude of yesterday’s for the S&P 500 to create a bullish impulse leg on the daily chart. Specifically, the index, currently trading around 1160, would need to exceed a peak at 1210 that was recorded on March 15. We have to drill down to the 5-minute chart to find an impulse leg capable of sustaining the rally for at least another day or two. Bottom line, if this rally is the real thing, it should be able to reach a minimum 1169.38 today. That would create a somewhat more robust impulse leg, one with the potential to produce a bullish follow-through next week.