Stocks and a slew of other risk assets were relatively quiet to slightly lower as the world awaited a solution for the second Greek bailout and the latest round of earnings data was released. From our point of view, the major averages confirmed their latest rally attempt on Tuesday 1.3.12 which was Day 9 of their current rally attempt. It was also encouraging to see the S&P 500 break above its downward trendline and its longer term 200 DMA line. Looking forward, the S&P 500 has done a great job staying above its Q4 2011 high (~1292) and now has its sights set on its 2011, high near 1370. In addition, the bulls remain in control as long as the benchmark S&P 500 trades above 1292 and then its 200 DMA line.

World Awaits Greek Bailout & Earnings Mixed To Slightly Higher:

Stocks were quiet again on Wednesday as the world continued to wait for a solution to the second Greek bailout and the latest round of earnings were released. Economic data was light, the Mortgage Bankers Association said weekly mortgage applications rose sharply last week which was another sign of a bottom in the ailing housing market. As we have said since the end of 2011, the housing stocks have appeared to have traced out a near term bottom and they usually move 3-9 months before the housing market moves. Therefore, if they continue to rally we have to believe that a bottom is in place for the ailing housing market. Earnings data was mixed but the market’s reaction so far has been positive.