Not too much guidance from the futures – they drifted down overnight and then quickly made it all back. The indecision evidenced by yesterday’s doji may very well continue into today.
There’s an old market saying - “Buy on the rumor, sell on the news”. There is a school of thought that could easily explain the buying since last Friday on the rumor that “Mark To Market” is going to be suspended or otherwise adjusted. This is a regulatory adjustment that would be crucial (in the eyes of the market) toward alleviating some of the issues facing the financial industry (no, I’m not going to try and explain mark to market here).
All week long things have been abuzz because hearings will start today in the House Securities Subcommittee that could get the ball rolling toward solving the mark to market problem. While it is widely assumed that repeal of mark to market would generate a BOOM in the financial sector (go FAS!) – just the announcement and the start of holding hearings seems to be have been enough to generate interest and excitement. So keep an eye on these hearings and market reaction – I have no idea that something will be announced today, but it is something that has the market very excited and potentially has the power to start a major move to the upside.
In the meantime, keep an eye on breaking through S&P 731 on the upside and S&P 710 and 700 on the down,. I wouldn’t be surprised to see a little more indecision or sideways movement before anything substantial happens though.