April Fools

Good morning. It's a new month and quarter and premarket futures are showing a positive bias amid hope that the credit crisis is easing. A sharp rally in the U.S. dollar has helped contribute to the positive mood while traders react to strength in overseas markets and weakness in commodities.

Premarket gainers: TMA, CEGE, ITMN, LEH, UBS, C, GS, AKAM, JPM, MS, CSK, ASTI, CDS, PGNX, AKNS, TSRA, HANS, CAO, ORLY, ESLR, IMH, COMS, NOK, CHINA, SPWR, MELI, RIMM, DRYS, and VVUS.

Premarket losers: VRTX, KFN, TMY, RMG, DDSS, SIVB, TISI, MO, GOLD, GLD, AUY, and YHOO.

On the economy we have the ISM Manufacturing Index (expectations are for a reading around 47.5 below the key 50 level that shows economic contraction) and a report on construction spending at 10:AM. Motor vehicle sales will also be reported later in the session and please keep in mind that Bernanke is scheduled to speak tomorrow and Thursday before the Senate Banking Committee.

According to Stock Trader's Almanac, April is still the best Dow month (up an average of +1.8% since 1950) and that market tends to anticipate great first quarter earnings by rising sharply before earnings season begins rather than after. CXO advisory also offers some historical performance information since 1990 that also shows that we tend to start off April on a positive note.

Hope can start a rally, but not sustain it for very long unless the bad news is already fully priced in. That's the big question as we enter what will likely be a tough earnings season soon. Technically, I'd like to at least see the S&P 500 at least break above 1350 which will later set up the all important test of the 1400 area that I've been harping on for months now. Without that technical confirmation, all we have is hope and that's not enough unless your playing with other people's money.

Let's get to work!