The summer doldrums have been worse than usual this year as traders await decisions on new stimulus measures out of Europe, China and the United States. Until then, they had little excitement with mixed economic data, light news flow and dismal trading volumes. In fact, just 497 million shares traded on the NYSE primary market Wednesday, pulling its 10-day moving average down to levels not seen since 1998.

People are just checking out of the stock market, which is a positive from a contrarian perspective. Combine that with macroeconomic momentum, attractive valuations, cyclical issues that are cheap versus defensives, and the specter of fresh stimulus, and I'd say these folks are making the wrong move.

Thursday, that hunch was proved right as stocks and other risky assets blasted out of one of the tightest trading ranges in market history. Now the stage is set for additional gains in the weeks to come.

In Europe, the recalcitrant Germans are softening their resistance pro-growth stimulus measures somewhat. Stocks jumped just after 11 Thursday morning after German Chancellor Angela Merkel voiced support for recent comments out of the European Central Bank that it would do whatever was necessary to protect the Eurozone. She also stressed that time is of the essence in finding a solution to the crisis.

The fundamental outlook is also improving. You can see this in the chart of the Citigroup Economic Surprise Index, shown above, which is improving as the data no longer surprises to the downside. Improvements in this measure are closely associated with rebounds in stock market performance.

While the data is improving, it's still mixed with lower inflation data bolstering the case for fresh Federal Reserve stimulus (Fed chair Ben Bernanke hates whiffs of deflation), while July industrial production crept higher and NAHB builder confidence surged to its best level since early 2007.

There was also a widely read Goldman Sachs report on Wednesday that suggested the Fed may not take action to bolster growth until late 2012 or early 2013 -- ostensibly in reaction to some recent firming of the economic data (as highlighted in last night's letter).

I think it's a win-win: Either the data cools a little and the Fed acts in September, or the economy revs up on its own. And besides, the Fed isn't the only central bank considering action.

Indeed, Wednesday night Chinese premier Wen announced that easing inflation allows room for additional monetary policy easing out of the People's Bank of China in response to downward pressure on the economy.

Either way, it's good for risky assets. Despite the flat broad market performance, there are signs savvy traders are buying into this theory. Cyclical, economically sensitive stocks are firming. Money is pouring out of haven trades like Treasury bonds and the Japanese yen.

And now, finally, stocks are taking flight from their multiweek perch just above the important 1,400 level on the S&P 500.

Trading update

I'm using the surge to book some profits in my Edge Letter Sample Portfolio. I'm closing Teekay (TK) and Amkor Technology (AMKR) for gains of around 5% since adding them in late July. To take advantage of outflows from haven assets, I'm adding a position in the ProShares UltraShort Yen (YCS).

I am also adding International Business Machines (IBM) on a powerful move above $200 a share.

Disclosure: Anthony has recommended YCS to his newsletter subscribers.

Check out Anthony's investment advisory service The Edge. A two-week free trial has been extended to MSN Money readers. Click here to sign up. Contact Anthony at anthony@edgeletter.c​​​om and follow him on Twitter at @EdgeLetter. You can view his current stock picks here. Feel free to comment below.