A tough close into the bell, still the whole day seems nothing more than a market loosening it’s belt after a very big meal.     Digestion.   So what's going to be the deal here?   Do we consolidate or we keep churning higher?   First of all,  we should dismiss yesterday's super rally as a one time event.    Performance like yesterday just can’t be repeated, there’s little ammunition left from the Fed-Treasury.   While the market pulled back within a few points of SPX 800,  we feel the market would still be in a pretty healthy shape even if it drops to SPX 780 level in the very short term.    Still, as we noted mid-day an underlying bid was present on pullbacks.   We’ll see if the late slip is bid up at the open tomorrow,  if today’s tape is any indication, it should be.     Right now, it's just difficult to imagine we'd visit the early March low anytime soon, or ever,  so keep a bullish view.    Of course, as things change, we'd definitely revise the previous statement.     As we said these lawmakers can dampen things and today’s late slip was on the heels of some budget draft noise.   Unfortunately, this is a  D.C sideshow the market has to deal with on a daily basis now.

The key in this trading environment, is to follow the overall trend.    You can make money as a bull or as a bear.   But when the market is clearly on the uptrend,  you'd make money ten times easier being a bull.    This is just about the complete opposite psychology from a month ago.    What we have on our trading list these days are a lot of "oldies"!    We brought a lot of them back because that's where we find many of the relative performers in this market.    Today we got a nice early gift in EBS , even though we didn't anticipate such a volume (2mln) move so soon,  we'll take it as a signal something is more imminent that we thought.    In the commodity space, steel, agri. are quite strong.    We've been busy trading some, eg X CLF MOS.    Given the huge gains yesterday,  oil linked plays also had a relatively healthy pullback.     If you look at $CRX , which is the commodity index followed here,   it shows that we aren't that far from 6 months high.    If we can manage to break out of 550 level, who knows how much higher it will go.     This of course all follow our recent thesis of "lots of money being pumped into the system and commodity are being picked up against future inflation".

Financials provide traders with mojo these days, but we feel there's enough plays out there that can be as attractive to play with lower risk.   Names in our shadowlist is where we stick to.   Tech’ space ..semi’s, hardware are providing pockets to trade.    We are strictly back to sector and individual plays and away from worrying about the technical side of the SPX as discussed late last week following the FED big bang. 

Also note, we are into preannouncement time for earnings.  It will be interesting to see reactions of individual equites reporting such and it’s sector to the news..good or bad.