Looks like over the past few days, the market has been consolidating its gains. This is quite normal considering how volatile the environment has been.
Things to be aware of
1. Oil continues to go higher
2. Wamu raises 7 billion to remain above its required reserve ratio - Moody's upgrades outlook to "stable", for now.
3. Solar is still hot - FSLR just hit a new high yesterday of about 291+
4. BIDU continues to gain on GOOG
Earnings season comes in full swing in the next couple of weeks. I think the we've been in a holding period until we have more indications. If we find that companies reporting less than expected numbers continue to rally higher, it will be a great sign for the market. I expect that we'll see a large move in the market soon, due to the recent limited volatility. Short term, it looks like we want to go higher, but it's important to maintain a balanced perspective.
Personally I continue to be wary of any positive momentum we see here, however. Our financial system remains caught in a liquidity crisis, and I don't believe that recent moves by the Fed can truly repair the damage so quickly (repercussions will follow). Credit has been and will continue to be the lifeblood of today's economy - the rapid loss of credit continues to bear down on every segment of society. Although we're holding up pretty well, the data continues to be bad. Remember that stocks are moved by earnings and guidance. No matter how oversold we might be and no matter how "calm" things seem, bad earnings and guidance WILL drag the market down. What we're seeing here could be a flushing out of short sellers (as an anecdote, I'm seeing that a few unshortable stocks have become shortable, which means supply is back). Markets never bottom out because of short sellers, they bottom out because people truly give up on stocks. I haven't felt any sentiment of this nature since last August yet.
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