Positive tone...

Despite a negative close carryover aided by a terrible ADP#,  which lead to a downside gap,  we alerted the ISM # / JPM bond offering might lead to a good tone from here.   The heads up didn‘t disappoint and gradually came to fruition as we slowly moved higher, a desperate attempt to replicate the 3pm action from the previous day by the shorts fizzled.    In fact, we also managed to take out yesterday's high and closed above it.    You do have a sense that this market is hungry for good news since the bad news (ADP) just can't seem to shake it down.   Tomorrow we have this meeting of directors at the financial accounting standards board, which may issue a relaxed mark-to-market rules  for credit securities.   This is evidenced by the strong rally in XLF, and most financial securities in general as the short covering rolls on.   As the saying goes, financials go up, so goes the market.    In the broad market, almost everything enjoyed a healthy day.    Just like we thought yesterdays close may lead to a lower open, we think today's close will lead to a higher open tomorrow.

We know this market is capable of going up and that's why we've been saying use some of the dips to get shadowlisted names in the 'working' sectors.   The trend, as we have been saying for the past few days, is up.   It just pays to go long as oppose to any other strategy.   The commodity group had a pretty decent day, helped largely by many steel and metal stocks rebounding.   We’d concentrate on CLF  X  as always.   Oil stocks, on the other hand, seem to lag the rest of the commodity group.   At this point, we feel oil group will catch up to the rest of the market, eventually.   Being in OIH  is just the easiest way to play the group.  Lastly, the solar plays such as STP  and CSIQ  had another good day as the earnings play noted yesterday tries to unfold.  There's no telling how much further they can go up and we don't believe the run-up will end anytime soon.

Tomorrow morning we have MON SCHN  reporting.    We'll be paying attention/ reaction to these two names as they can very well set the tone to the rest of their peers.   We also have RIMM  reporting in AH tomorrow and that's always the interesting one to watch.    Bottom line, M2M adjustment that's favoured for the financial instituions is a huge deal, in our opinion.   Right now, all signs point to a revision that'll benefit the market.   Basically, the recent market high is literally one piece of good news away from being broken out.