Monday Morning Musings

The market is getting a nice bounce in early trading on this first day of the month, and also mutual fund Monday (where funds put new money to work). There was news over the weekend that a bailout is in the works for Greece, with German and French state-owned banks likely the buyers of the debt.

There was a large earthquake in Chile over the weekend, which has caused a spike in copper prices (a lot of production comes out of Chile), so metals-related stocks are higher this morning. But the dollar is also higher, which is weighing on gold ($1114), while oil prices are relatively stable near $80.

In economic news, the ISM Manufacturing index for Feb. came in at 56.5, which is a bit below expectations, as well as below January's levels. In Europe, the eurozone manufacturing index hit a 30-month high, which is a good sign.

In corporate news, Merck KGaA topped Thermo Fisher's (TMO) bid for Millipore (MIL), and they will pay $107 per share in cash. Also, AIG will sell a pan-Asian life insurance business to Prudential PLC (PUK) for $35.5 billion in cash and stock.

Asian markets were higher overnight; the 10-year yield is also higher at 3.62%; and the VIX is roughly flat at 19.50.

Trading comment: Financials are lagging today, but many stocks are completing constructive basing patterns. The Nasdaq is breaking out over its 50-day moving average, as are a large handful of tech stocks. Some of the setups I am watching include: AAPL, ISRG, RIMM, FFIV, IBM, CTSH, WYNN, URBN, ATHR to name a few.

We still never saw the classic high volume follow through day that marks the start of many new rallies, but if things hold up, I think we could see more signs of accumulation coming.

long all stocks mentioned