Market Perception Rules

Good morning. Very big gains in overseas markets, speculation of takeovers in the bond insurers, and positive news from Microsoft (MSFT) and Amgen (AMGN) among others have premarket futures well into positive territory. Fortunately, there's no economic data due out today.

Premarket gainers: SCSC, VPRT, COIN, BRCM, EZPW, JRJC, TASR, ETFC, SPWR, CTDC, LRCX, CVTI, CPWR, AKNS, BIDU, ACGY, CSUN, INSW, SOLF, MSFT, CTRP, EXTR, ESLR, GIGM, POT, TBSI, JAVA, MELI, FSLR, PMCS, NVDA, CSCO, JNPR, WFR, AMGN, HOKU, FWLT, MRVL, JASO, ENER, STP, TRA, CSIQ, ERIC, BPHX, GRMN, XING, MOS, DRYS, PCU, RIMM, and AAPL.

Premarket losers: SYNA, DROOY, VSEA, TPX, HMY, TGI, RYAAY, MBRK, IDTI, ZION, STKL, IBKR, AAUK, and KLAC.

No doubt, the bulls are going to try to make a run for it. Armed with a fresh stimulus package and high expectations for even more rate cuts next week, along with a hopeful sense that most of the recent "panic" was a result of just one rogue trader versus a slowing worldwide economy have provided fuel to the fire. Combine all of this with the expectation that after major market corrections, come fast and furious rallies where huge profits can and will be made. Perception, not reality, rules the markets and it can change in a New York minute. This week has provided yet another textbook example of that classic behavior.

Looking ahead to next week, there are some big obstacles in the road including whether the Fed gives in to the market's demands along with lots of more earnings and economic data (like Friday's jobs report). And, unless you think this month was just an entire head fake and the best buying opportunity we'll see this year (I'm still not in that camp), deploy money very carefully and expect that even in spite of the recent surge in optimism there will be some significant challenges ahead.

Have a great Friday!