Guest Post: Thursday

Dow and the S&P at new all time highs. The Dow rising 1000 points in 17 days and the S&P also rising 8.3% in that time. GDP estimates have been down trending, macro data has been disappointing, and earnings haven't been outstanding. This is Chairman Bernanke's world and the fundamentals are no longer relevant. It will be interesting to see how the Fed crawls out of this liquidity trap.

With that said, traders are intently tuned into Bernanke's testimony as he speaks again for his second day in front of Congress, this time in front of the Senate Banking Committee.

In corporate earnings news, American Express (AXP) reported above consensus earnings on revenue below estimates. eBay (EBAY) reported in line earnings but was discounted by cautious third quarter guidance. IBM beat on earnings but missed revenue. Intel (INTC) reported in line earnings but lowered guidance. Morgan Stanley (MS) beat earnings and revenue expectations.

Asian markets ended mixed overnight. China's house prices have risen 6.8% month over month and the government is increasing credit support for exporters to improve trade. Over in Greece, parliament passed a bill calling for 25,000 layoffs in the public sector.

In economic news, initial claims decreased by 24,000 to 334,000. However, this number is difficult to take at face value due to seasonal adjustment problems and there is a lot of whipsaw volatility in the data.

VIX is lower at 13.50 and the 10 yr sits at 2.52%.

Written by: Nicholas Mueller