The bulls look unstoppable, pressing their advantage and forcing the bears — who looked like they were going to gain the upper hand for the first time in two years — into an impressive short covering scramble. And the evidence suggests it could continue for at least another couple of weeks.

The Dow Jones Industrial Average gained another 1.3%, the S&P 500 gained 1.2%, the Nasdaq Composite gained 1.6%, and the Russell 2000 small cap index gained 1.8%. Gains dropped slightly nearing the close on new Ebola headlines. Crude oil was able to get off the mat a little on reports that Saudi Arabia cut supplies in September, but precious metals were dropped hard.

Solid earnings results from the likes of Caterpillar (CAT) bolstered sentiment, pushing the stock up nearly 5%. There was also help from 3M (MMM), which gained 4.4%.

Economic data was mixed, with the Federal Housing Finance Agency House Price Index posting its first increase in the year-over-year rate this year as a drop in mortgage rates encourages buyers to get back into the market. Still, home price appreciation has cooled to a 4.8% annual rate, down from a peak of nearly 9% last year.

The flash PMI Manufacturing Activity Index was a bit of a disappointment as slowdowns in Europe and Asia drag on U.S. factory activity. New order growth slowed to its weakest in three months. Yet flash PMI readings from these regions actually surprised to the upside. So we’ll call it a wash.

The big news has been the turnaround in market breadth as a wide and growing share of the market participates to the upside. Not since May have we seen this percentage of NYSE stocks above their 50-day moving average accelerating upward.

But hurdles remain, including reports of a possible Ebola case in New York City, disappointing results from Amazon (AMZN) after the close (with shares down more than 10% afterhours), and the looming Federal Reserve policy announcement on October 29 concerning the end of the QE3 bond purchase program.

For now, I’m recommending a cautious approach with a focus on beaten-down energy and industrial stocks. Examples include November $97.50 CAT calls I recommended to Edge Pro subscribers earlier this week, which are no up more than 73%.

Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters, as well as Mirhaydari Capital Management, a registered investment advisory firm.