Market Gets More Good News

The market is getting a nice bounce in early trading. But this is the Friday, and the last day of the month, so the question is can it last?

Dell reported disappointing earnings last night, and that is weighing on the Nasdaq. But the financials are flying as reports swirl that the Bush Admin. is in talks with major financials institutions to implement a plan that would temporarily freeze rates on subprime loans to stem the tide of foreclosures and ease the credit crunch.

Also, last night Bernanke gave a speech were he was more dovish than previous times, and this lends further credence to the notion that the Fed is prepared to cut rates further.

There was some benign inflation news this morning with the core PCE coming in in-line, and the yield on the 10-year is back near 4.00%. Also, oil is falling again, breaking under $89 for the first time in roughly a month. This should help consumer sentiment.

And the Yen is down again also, which is my favorite indicator right now. Asian markets were up again overnight too.

The markets likely ran into some resistance this morning. For the SPX, we expected resistance around 1490, and around 2700 for the Nasdaq. Those levels were touched this morning, so a pullback from there is normal. The key is to see those levels exceeded fairly soon to keep this rally alive.