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Greenspan testimony sparks debate

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As Fed Chairman Alan Greenspan testifies before the House Financial Services Committee, the generalities of his testimony have Mr. Greenspan cautiously optimistic about the U.S. economy, but work to be done before a stronger turnaround could be seen as more certain.

"I continue to believe the economy is positioned to expand at a noticeably better pace than it has during the past year, though the timing and extent of that improvement remains uncertain," said Mr. Greenspan.

While Greenspan's testimony had found debate among the House Financial Services Committee member, its done the same in this morning's market monitor. Good points from bears in my opinion, but the equity markets seem to hint of bullishness.

The NYSE Composite ($NYA) 5,137 +0.4% now shows a 21-point gain, and was the first major index I saw to turn green on today's session. Not long after, the smaller to mid-cap Russell 2000 Index (RUT.X) 397.48 +0.42% edged into positive territory and has now built a more "respectable" 1.75-point gain. A key level discussed in this morning's market monitor for the RUT.X is a trade at 400, which would be a violation above longer-term downward trending bearish resistance.

Then.... as if the other equity indexes were to make similar observations that the widely institutionally held NYSE Composite (NYA) were turning green, the major indexes we follow in the Index Trader Wrap have now turned higher.

The Dow Industrials (INDU) 8,516 +0.16% now shows a 12 point gain after a morning low of 8,432, the broader S&P 100 Index (OEX.X) 567.21 +0.26% and S&P 500 Index (SPX.X) 920 +0.25% have moved into positive territory with respective 1.2 and 2.2-point gains. It's notable that the OEX fell right into our first "zone of support" for about 5-minutes (462.24-463.35) with a session low of 462.75, consolidated above that level and has started to spring forward.

The NASDAQ-100 Index (NDX.X) 1,114.63 -0.2% is off just 2.6 points and did manage a move back to unchanged after a morning low of 1,104.39.

Jeff Bailey

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