Stocks surged again Thursday on hope that the worst of the economic downturn is over. Better than expected earnings from Procter & Gamble also helped.

The ISDEX http://www.wsrn.com/apps/ISDEX/ gained 1 to 176, and the Nasdaq rose 20 to 1934. The S&P 500 gained 16 to 1130, and the Dow surged 157 to 9920. Volume declined to 1.53 billion shares on the NYSE, and 1.79 billion on the Nasdaq. Advancers led by 20 to 10 on the NYSE, and 21 to 14 on the Nasdaq.

After the close, Adobe gained on a bullish outlook. Computer Sciences and MicroStrategy, the original accounting implosion, both beat estimates.

During the day, Intel gained 3.5% on bullish comments from Merrill Lynch.

Oracle tacked on 4% on bullish guidance from the company.

Check Point surged 11% on positive earnings guidance.

Netegrity soared 18% on better than expected results, but Speechworks slipped 2% on its results. Brocade gained 5% on a Buy rating and bullish comments from Merrill Lynch.

Some technical comments on the market: Note: To see the charts in the text email newsletter, click on the internetstockreport.com story link at the top of the newsletter.

The two big barometers for the year ahead - how stocks perform in January and whether the December lows hold in the first quarter - both came in on the bearish side, with a down month for stocks that also included undercutting December's lows. The indicators are by no means perfect, maybe an 80%-90% correlation, but given the overvalued state of the market and high consumer and corporate debt levels weighing on the economy, 2002 may turn out to be another tough year for stocks. Given that major lows tend to occur in the midterm year of the four-year presidential cycle (1974, 1982, 1990, 1994 and 1998 are just a few examples), that's not too far a stretch from a historical perspective. The Dow (first chart) looks very good, and another up day tomorrow in the 130-150 point range would look downright bullish. However, the index is right under the 50-day moving average at 9939, and 10,000 resistance is right after that. First support is 9850-9900, and 9700 is critical support. The S&P (second chart) cleared 1117-1118, a critical resistance level now turned support again, and is right back at that tough 1132-1140 resistance level. We'd give it a clean bill of health above 1140, but 1143-1150 looks pretty tough too. The Nasdaq (third chart) faces a boatload of resistance in the 1959-1970 range - assuming it can clear its 200-day moving average at 1940 first. First support is 1915-1920, and then 1906. Finally, the VXN (the fourth chart), the Nasdaq options volatility index, hit a new low again today. That's a sure sign of complacency, the one thing that could undo this rally. Remember last summer, when complacency came back in quickly on every rally? Bear markets decline on a slope of hope, as they say. We'll see if price, the final arbiter, says otherwise.