9:00am (EST)

The bulls got a pair of Aces yesterday and appeared to have a set hand as futures were pointing towards a strong start.  Their first Ace was China which reported a stronger-than-expected GDP number then a second Ace when Bernanke said the Fed still has bullets left in its smoking gun.

The bears knew before the bell that their 3-session win streak was on line and the market reached its height on the “flop” after Bernanke said the Fed would keep the ball rolling on monetary policy. 

However, for anyone that plays Texas Hold ‘Em, the bulls had two more cards they had to get through to win the pot so things weren’t a lock.  The “turn” card looked good as the market headed into the final hour but many of the bulls were nervous as the gains started to dwindle.

By the closing bell, the “river” was scary as you know who played a spade (Moody’s) and put the U.S. under review for a credit rating downgrade.  It was the first such downgrade for America since the mid-90’s.

The knuckleheads at Moody’s (MCO, $36.65, up $0.36) (and Fitch) missed the mortgage meltdown and financial crisis and have been spooking the markets on facts that the entire world already knows.  Moody’s also put other financial institutions on watch, including government favorites Fannie Mae and Freddie Mac (FMCC, $0.37, up $0.01), but the market finished higher which gave the bulls some renewed confidence.

The Dow managed a gain of 45 points, or 0.4%, and finished at 12,491.  The index traded to a high of 12,611 which is where we were hoping for a close but we were a little disappointed 12,500 didn’t hold.  The 12,600 level still represents short-term resistance with risk down to 12,350 after the index gave back over two-thirds of its gains.

The S&P 500 added 4 points, or 0.3%, to settle at 1,317.  The index kissed a high of 1,331 and was looking to close above resistance at 1,325 but was denied.  The bears are still eyeing a drop to 1,300 and below so the bulls will need to end the week strong.

The Nasdaq popped 15 points, or 0.5%, and ended the session at 2,796.  Tech reached a high of 2,825 which was our closing target but failed to hold 2,800 which was a letdown.  Until the bulls put 2,800 in the rear-view mirror, there is still a chance of a fallback to 2,750-2,700.  The 52-week high for the Nasdaq is 2,887 which, if cleared, would pave the way for a run at 3,000.     

Meanwhile, Gold surged to a record high of almost $1,600 an ounce, topping out at $1,589 before eventually settling at $1,585 for the day.  Might as well pencil-in $2,000 an ounce for gold in 2012…

Now, if we could only get the Keystone Cops in DC to work over the weekend to get a budget deal done instead of walking out of meetings (Obama).  

As we head to press, Dow futures are higher by 28 points to 12,453 while the S&P futures are up 5 to 1,317.  Tech should zoom as the Nasdaq futures are showing a gain of 14 points to 2,358.  Subscribers, check the Members Area for the updates.