Stocks closed out the week on another strong note, but despite a big gap up this morning, they're moving lower on the day so far. More volatility in both directions continues to keep everyone honest - something that seems to be a building theme lately. We're only a few weeks away from another very important earnings season, so it will definitely be interesting to see where stocks are once Alcoa (AA) kicks off the new earnings period on July 19th. The guys over at Elite Opportunity Pro continue to believe their target on the S&P 500 is inevitable. However, depending on where the index is come earnings time, it's possible stocks have priced themselves well ahead of the curve lately. With the S&P 500 continuing to trade all over the place over the last few weeks, any substantial move lower could take the index down to its 50 day moving average around 2,400. That would have to hold, but strictly from a fundamental perspective, the S&P 500 is projecting more impressive quarterly earnings growth ahead. The tables below show the strength of first quarter earnings with 371 companies having beaten earnings, and only 95 missing. That's pretty good, but it's the forward projections you can see here that continue to support the bullish economic theme when it comes to the biggest driver of stocks - their earnings. Not only are the S&P 500 companies projected to continue to earn more and more throughout 2018, their P/E ratios are also projected to come way down in the back half of the year, and well into 2018. Who knows if they'll be right, but if we trust what the S&P 500 is telling us, there's more room for higher levels ahead. There just doesn't seem to be any real reason at this point for anyone to continue to question what these markets might want to do on a go-forward basis, because not only does the technical landscape continue to look good, so does the fundamental landscape. That's a pretty deadly combination right there. If small caps have anything to do with the markets next big move though, we could be in for one of their best moves in a long time. The Russell 2000 hasn't manage to keep up with the rest of the markets ever since the big Trump rally following the election, but we do like the way the index has been building a base ever since. They always say when risk is on, stocks are going to do well, so if small caps can really start to trade better, it's enough of a fundamental backdrop to suggest this is where investors may want to start focusing their efforts over the next several months. Small caps can be tricky no doubt, however, any sort of favorable tax reform is probably going to put the higher quality small cap names in a position to rally over the next several months. They'll need to show us they're ready to break out again soon, but it does seem they could be well on their way soon. Have a great Monday!