Stocks Firm Ahead of Long Weekend

Stocks opened a little soft, but quickly moved into positive territory as investors wonder if the market can build on yesterday's strong turnaround. This weekend is a 3-day weekend, and the stimulus plan vote is supposed to come tonight, so I doubt traders will be willing to take any big positions ahead of the weekend.

In corporate news, Pepsi (PEP) and Abercrombie (ANF) both reported solid earnings and their stocks are nicely higher. Outside of these reports, there is not much market moving news this morning.

Asian markets were positive overnight, with China nearning a five-month high. The dollar is mixed today, but the Yen is weaker which is a positive sign. Oil is higher, near $35.50, and gold is lower after hitting $950 yesterday.

The 10-year yield is up to 2.86% today, after a 3-day slide. And the VIX is lower again, to 40.85, following a big downside reversal yesterday. A break below 40 would be another positive development to watch for.

Trading comment: Yesterday's session was dicey, as the SPX broke below the 815 level, but then rebounded sharply late in the day to recoup all of its losses. I took partial profits in my inverse etf hedges, but still have half my positions on.

Unless the S&P 500 can recapture its overhead 50-day average in the near future, my inclination will be to add back to my hedges and get more defensive. But I want to give the market the benefit of the doubt first.

long SSO