Planet Wealth

The rally held for a second day, aided again by a weaker dollar.  There were more good earnings reports from CMI, WHR, ANN and UPS.  The interesting part was the commentary from the companies regarding the health of the US economy.  UPS said that it appeared the recession was over, although sales in the US were softer.....hmmm, doesn't seem to add up.  Their numbers were driven by stronger revenues from emerging markets.    WHR said that sales in the US were up as did ANN, which also gave good guidance.  The rally has some tough resistance ahead as it is right back up to that psychological 1100 level on the S&P, has risen on lower volume and just completed a perfect 38% retracement from the recent selling.  A further move higher from here would be a good sign for the bullish thesis.  The market does seem concerned about the continued jawboning coming out of Washington regarding tax increases.  The current administration has openly waged a war on wealth since taking office, however now it seems the middle class is going to be a bit shocked when the Bush tax cuts expire.  There will be more economic commentary in this blog in the coming days.  Tomorrow will be an important day to watch the market action and this current resistance level.