Happy Tuesday

Hope you are having a good morning. After a 5+ hour flight home yesterday with just me and my 3-yr old daughter, I came back to 100 degree heat in LA and no power! And let me tell you its no fun being without power with a 1-yr old and 3-yr old in that kind of heat.

SoCal Edison said that 29,000 homes are without power, but a spokeswoman on the radio this morning said she felt the company was handling the heat wave "pretty well". Huh?!?

Anyway, there's no room for whining in the market, so let's get to it. The market had a solid week last week, with a high volume rally on Wednesday that completely reversed Tuesday's weakness. The Nasdaq handily outperformed the S&P 500 for the second week in a row.

This morning, the Nazz is outperforming again. AAPL got a big upgrade from Piper Jaffray; KLIC raised Q4 guidance; and Bear named YHOO its top pick. This has the NDX up over +1%, and the semis are the strongest sub-sector of the market.

It is also a good sign that despite a big downgrade of the banks by Merrill, they are still positive, and the brokers are the 2nd strongest sub-sector so far.

Asian markets were mostly lower overnight, on profit taking after last week's rally. And the Yen is moving lower again also, which should ease some carry-trade fears.

Oil is still moving higher, with crude prices around $74.65. But the bounce-back in energy stocks mostly coincided with the overall rise in the market last week.

Bond yields remain steady, with the 10-year yield around 4.57%, a low level relative to the fed funds rate. I have not fully gone through Bernanke's comments from last week, but despite his need to save face, I still believe it is likely that they will cut in September and that it will not be the only cut we see this year.