Stocks Enjoy An Early Bounce

The market is higher in early trading, after another disappointing session yesterday. There was no real market moving news this morning, so this is more of just a reprieve to the selling. It is likely a combination of dip buying and short covering.

Intl. Paper (IP) made a big for Temple-Inland (TIN) for a big premium, but the bid has been rejected so far.

Later today, Bernanke will give a speech on "The U.S. Economic Outlook", where investors will be listening for his comments and views on how things will look post-QE2, and how the Fed will continue to stimulate monetary policy.

The Treasury will hold an auction of 3-year Notes today, with more auctions to come later this week. The 10-year yield is higher today at 3.04%, and the yield curve is actually steepening. This is a good sign for those who are worried about the economic slowdown, as the steep yield curve still points to a growing economy.

Asian markets were mixed overnight. There was a report out last night suggesting that China might hike its benchmark rate again over the weekend. The Reserve Bank of Australia held its rate steady at 4.75%.

Commodities are mostly mixed, but oil prices are lower again near $98.40, and gold prices are lower also to $1542 after yesterday's gains.

Trading comment: Today's bounce looks like it is coming on relatively light volume so far. I still want to adopt a more conservative posture while this correction runs its course. I am looking to use this bounce, and any further strength, to lighten up on positions, raise cash, and implement some hedges. If this correction follows the normal course, it will have bounces along the way, but at some point we could test the March lows at which point bearish sentiment will likely spike higher. That could present another solid buying opportunity. But let's not put the cart before the horse.