1:10pm (EST) 

It was a rough open for the market this morning but after the smoke cleared the bulls were still standing.  A lot of the movement lower this morning wasn’t due to the health bill but continued concerns over Greece and the euro.  Conflicting signals from European leaders over aid to Greece still have the bulls nervous but now that the healthcare debate is moving forward it seems to have lifted some of the overhang and the market is chugging higher.

The Dow is currently up 36 points to 10,777 after hitting a low of 10,695.  The index has traded as high as 10,796 and we have near-term targets of 10,800-11,000.  We have talked a lot about these two numbers for the past few months and they are still in play despite the overall negative sentiment.

The S&P 500 is up 4 points to 1,163 and held the 1,150 level which is what we were hoping for.  The index touched a low of 1,152 and our targets remain 1,175 and possibly 1,200.

The Nasdaq is higher by 13 points and is at 2,387 after sinking to a low of 2,358 on the open.  We still think the index can get over 2,400 and possibly 2,500 be we realize the market is frothy.

There are numerous headwinds we still face but we try to focus on numbers, trends, and support and resistance.  We were hearing last night that a lot of overseas investors will be taking their money out of the market if our health bill passes but what the talking heads aren’t telling you is the enormous amount of cash on the American sidelines.

Wall Street is smarter than Washington and it will figure this all out.  Given all the gloom and doom and how far the market has come it’s easy to predict a pullback and market pundits have been calling for one for over a month now.

We have learned over the years that you never short a dull market and that most times the crowd is often wrong.  We have been calling for this rally when others have been in denial but it doesn’t mean we aren’t looking for certain sectors or stocks to short.      

Turning to specific stocks, it looks like we have another “reverse”.

E*Trade (ETFC, $1.58, up $0.01) is the latest company to do try the “Hail Mary” in an attempt to lift its share price.  The company plans a 1-for-10 reverse stock split that could eliminate some of the speculative trading and named a new CEO in the process.  There is water-cooler talk that the company remains a ripe takeover candidate but we don’t see any opportunities in this dog, yet.

Elsewhere, Tiffany (TIF, $46.60, down $0.65) is bouncing back after touching a low of $44.75 at the open.  The company announced earnings before the bell that fell short of Wall Street’s expectations.  Tiffany earned $140 million, or $1.10 a share, versus $31 million, or $0.25 cents a share, in the year earlier period.  Analysts were looking for $1.13 a share. 

Revenue came in at $981 million and same-store sales jumped 11% in the quarter.  Wall Street was looking for sales of $970 million.  Tiffany also took a one-time charge that reduced earnings by $0.56 a share so really it was a great quarter which is why we are seeing a rebound.

It has been an interesting start to the week and we will likely see volatility pick up as more economic news and earnings reports become available.  There will be opportunities to go both long and short so stay tuned…