Looks like this week may turn out pretty positive. We opened this morning around the one month low and moving upward. Also, Senate Republicans are putting up a fight over the stimulus that passed the house the week asking for less spending, more tax cuts, more money for business and possibly a 4% mortgage for people with good credit. But it is unlikely that these concerns will significantly effect the passage of the bill. Ultimately, Republicans don’t want to be thought of as irrelevant and this is one way to include themselves in this bill even if they wont really have alot of control over the outcome.

Secondly, the 800 billion package is calculated into the market, but perhaps not completely because it is not clear exactly where all the money is going. Once the specifics are announced there maybe a good play on specific companies or industries effected by this bill.

Thirdly, China is talking about another round of stimulus. My guess is that they will have to do something because the whole regime is based on the governments ability to provide really high growth. People are willing to sacrifice democratic decision making for returns, but if the returns slow down then people get uphappy.

Here is the DOW chart for the start of the market today

And the month long chart.