Will The Market Break Its Recent Trend?

Yesterday, I noted the change in character of the market to rally in the face of additional negative headlines out of the financial sector. Well today, the market has a chance to show an additional change in character.

Yesterday's +3% rally in the indexes was the 3rd time it has done so in the last month. But the prior two instances had little follow through. On 3/11, the market surged but then went on to make new lows. And on 3/18, the market surged again, but gave half of it back the next day.

So if the market can hold on to its gains today, that would mark an additional change in character. The recent downtrend looks broken from a technical perspective, so we now need to see the market begin to make some higher highs, and higher lows on pullbacks.

The March ADP employment report showed some promise, as it indicated that the private sector added 8,000 jobs, vs. estimates for -45,000 losses. Hopefully this bodes well for the all important jobs report on Friday.

The WSJ is reporting that KeyBank (KEY) is in talks to buy National City (NCC). That would be good. They need to be bought.

Asian marekts surged +2-4% overnight. And the Yen is lower for a 2nd day. Both good. Oil is down slightly on an increase in reported reserves. Bond yields are up a bit, with the 10-year yield at 3.58%.

Bernanke is testifying this before Congress this morning. Poor guy. His comments are basically that GDP could contract slightly in the first half of 2008, that markets are still under considerable stress, and that inflation should moderate in coming quarters.