Most of the time, the U.S. stock market looks to 3 factors to support its upward trend – let’s grade each of the factors:

CONSUMER SPENDING:  I grade this factor a C (neutral).

THE FED AND ITS POLICIES:  I continue to grade this factor an A+ (extremely favorable) because the FED cannot do much more than it is doing to support the stock market and asset prices.  FED Chairman Bernanke appeared this week in front of Congress to testify the economic conditions were still not strong enough to cease the current favorable policy.

BUSINESS PROFITABILITY:  I graded this factor an A (very favorable).   Many companies will be reporting their profits to the public shareholders in the next 3 weeks – companies reporting their earnings last week exceeded expectations, on average.  We will continue to monitor this very closely for the next 3 weeks.