Services Index Hits Highest Level Since 2005

The market is off to the races this morning, aided by some strong economic reports. I think people are looking for a big number in tomorrow's jobs report. Let's hope they're not disappointed.

The futures were already higher this morning after gains in both Asian and Europe. Asian markets were mostly higher, but China was not. China's non-manufacturing PMI Index fell in February to its lowest reading in two years.

In Europe, the ECB left its target rate at 1.0%, and Trichet hinted that prices are rising and a hike could be in the cards in the future. This spurred a rally in the euro, at the expense of the dollar.

In the U.S., weekly jobless claims fell again, to 368,000. This marks the third week under 400k. Also, the ISM Services Index rose to 59.7 in February, its highest reading since 2005. I have been talking about how strong the manufacturing sector is, but this strength in the services sector bodes well for the economy.

Oil prices are lower today, thought still above $100, after Libya has entered peace talks. Gold prices are also lower to $1420.

The 10-year yield is rallying to 3.55%; and the VIX is plunging 9% to 18.85.

Trading comment: The market is clearly showing its resilience again this morning, especially considering oil is still above $100 and things have not really calmed down in the Middle East. Also, while the market is up a lot this morning, the most important thing is how it closes. So we need to see these early gains stick. If that happens, it certainly would alter my thinking about how much more downside is in store for the market.

Lots of market leaders have held up well, and some are even breaking out to new highs again (see PNRA, ALXN, APKT, RVBD, CIEN, HMSY, etc). Color me surprised. But that's why they call it trading, and not (as Charlie Sheen would say) "winning".