12:45pm (EST)

Futures were pointing towards a strong open this morning after the G-20 update, a weaker dollar, and an existing home sales report that came in better-than-expected.  Corporate earning has also added to the bullish momentum as the market continues its push towards its April highs.  The bears were hoping Ben Bernanke would do his best Elmer Fudd but he looked steady as he talked about the current foreclosure debacle.

Big Ben said the housing remains weak and that Federal banking regulators are jointly carrying out an in-depth review of foreclosure practices at the largest mortgage servicing operations and said they are going over things with a fine-tooth comb. 

More specifically, the suit-and-ties are looking at the many of these companies’ policies, procedures, and internal controls to see if they pulled the trigger a little early on kicking homeowners to the curb.  Bernanke also said we could know the preliminary results of the probe by next month and they are taking a look at what impact this will have on the current housing situation.

The National Association of Realtors said existing home sales for September increased 10% month-over-month to an annualized rate of 4.53 million units, which is greater than the annualized rate of 4.25 million units that had been penciled in.  Although sales were down nearly 20% from the same month a year earlier, the 10% month-over-month climb is among the strongest on record.

Turning to earnings, Sohu.com (SOHU, $75.30, up $9.54) is up 15% after blowing past Wall Street’s estimates.  The company reported a profit of $39 million, or $1.01 a share, versus $34 million, or $0.88 a share, from the year earlier period.  Analysts were expecting profits of $36 million.  Revenue jumped 20% to $164 million.  



As a result, the major averages are extending last week’s gains and the bulls clearly have started off the week looking to break through resistance.

The Dow is currently up 47 points to 11,179 and has traded above our 11,200 target.  The index has hit 11,247 and if the bulls can muster a close ABOVE our target then we can set our sights on Dow 11,500 with a possible run to 12,000 by year-end.  Support is at 10,800.

The S&P 500 is within spitting distance of our 1,200 target and is showing a gain of 5 points to 1,188.  The index has traded as high as 1,196 and could reach 1,250-1,300 if the momentum continues while support lies in the 1,170-1,175 zone with 1,150 serving as backup.   

The Nasdaq is higher by 14 points and is at 2,493 but has broken above our 2,500 target as Tech has traded to a high of 2,507.  We have gone on record and said we would eventually get here and if we did the rally could carry Tech to 2,600.

We have a number of trades going that we are currently in and they are benefiting from today’s rally.  We also have a number of possible trades on our Watch List that are thisclose to becoming official recommendations.  Subscribers, check for the updates.

We will be back in the morning with a full update.