April 23 Daily Market Assessment

Off to the Races!

The bull market has been confirmed by a strong upward push last week. After earnings expectations were lowered earlier in the month, company after company has come through with good numbers. In fact, 1Q07 will likely report the highest corporate earnings in history, a number approaching $500 billion!

With that said, I expect a soft market today, since no significant news or earnings reports will appear until tomorrow. The market likely will "take a breath", and may even dip down. But all the signs are in place for another good week. VIX is close to 12, having dropped from 17 just six weeks ago (VIX is a measure of fear in the market), the shorts are way overboard, which suggests a short squeeze this week, and the GDP numbers will probably be O.K.

Consequently, I am moving back into the market. Today and tomorrow I will commit approximately 30% to equities and 10% to options. More details later.

Summary: Short term bullish, Long term bullish