Market Bounces On Strong Jobs Preview, Lower Yen

The market is getting a big boost in early trading, although you know I hate to see too much strength early in the session. Too often lately we have seen rallies fade by the end of the day and close near their lows. Let's hope we buck the trend today.

Last night, Fannie Mae (FNM) cut its dividend. Last week, when Freddie (FRE) did that, it took the whole market lower. But today it appears priced in. Also, positive comments out of AIG that its losses are minimal could be bolstering the financial sector.

The ADP report this morning point to a gain of 189,000 jobs in November, which is much stronger than the consensus was looking for. I guess this is good news, as it means recession is less likely. But on the flip side, a weak jobs report would have made it more likely that the Fed cuts rates by 50 bps next week. Go figure.

Asian markets rallied across the board last night. And the Yen is lower today. From my perch, the lower Yen has as much to do with it as anything you will hear today, even as it is never mentioned in the media.

Also, oil is a bit higher, touching $89 after OPEC decided not to raise output. Its seems OPEC is a little worried about the economic outlook as well, which would damper demand for oil.

I would like to see the market flatline for a while today, and then launch a late-day push higher into the close. The last thing I want to see is this rally fade into the close. If we hold, it would support my view yesterday that a 2-day pullback was in the cards, nothing more.