Markets toggled between gains and losses as investors digested U.S. economic data. Weekly jobless claims came in at 386,000, more than the projected 375,000. In a separate report, inflation eased in May with the consumer price index falling by -0.3%. Investors also remain cautious on the uncertainties in Europe while heading into the Greek elections on Sunday. Regardless of the reasons pundits may point to for why stocks rose, it was an encouraging sign to see the market shake off negative news. Despite the weaker-than-expected result in weekly jobless claims, equities traded higher throughout the day on speculation that the Federal Reserve could provide further stimulus. In the final hour of trading, stocks extended gains after reports circulated that several central banks were prepared to increase liquidity in financial markets if needed.

All 10 sectors on the S&P were higher. Consumer stocks had gains as shares of McDonald's Corp (MCD +1.99%) and AT&T Inc (T +2.03%) were in the green. Meanwhile, Nokia Inc (NOK -15.77%) fell after the company announced plans to cut 10,000 jobs and lowered their earnings guidance.

In bondland, Treasuries were lower along the curve. The benchmark 10-year note gave up 11 ticks to yield 1.63% and the 30-year bond was off 5/16 of a point to yield 2.72%.

Technically, the major averages (M criteria) are still considered to be in a rally attempt within an ongoing correction, and stocks may still be vulnerable to  greater downside.  Historical studies suggest that the most constructive market rallies produced a solid follow-through day (FTD) between Days 4-7 of a new rally effort. Although we are beyond that most ideal window, subsequent gains of +1.4% or greater by at least one of the major indexes, backed by higher volume (preferably above average volume) and coupled with an expansion in the number of stocks hitting new highs, could still confirm the rally as long as the "Day 1" lows are not undercut. Only fresh technical proof may give fact-based investors the clearance to begin with new buying efforts strictly in sound buy candidates. Meanwhile, investors should keep up a watchlist of worthy buy candidates while remaining protective of capital.

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PICTURED: The S&P 500 Index is approaching recent highs and its downward sloping 50-day moving average (DMA) line on Day 9 of the still unconfirmed rally attempt.