| Fellow Investor, Stocks look poised to continue the rebound from 1,250 on the S&P 500. We've got the ADP private payrolls on Wednesday, Non-farm payrolls on Friday and then Q1 earnings season kicks off on April 11. There have been no significant earnings warnings ahead of Q1 earnings. And in fact, the last Q4 earnings reports that trickled in were very good. Red Hat (NYSE:RHT), Micron tech (NYSE:MU), ConAgra (NYSE:CAG) and Oracle (Nasdaq:ORCL) all posted good numbers last week. And FedEX (NYSE:FDX) was bullish the week before. The takeaway here is that, despite the instability in the Middle East and the consequent ramp in energy prices, in spite of the tragic situation in Japan and the consequent supply disruptions, corporate profits are chugging along. And the income and spending data released this morning supports the view that profits should continue to improve. Consumer spending was up 0.7% in February. That was more than expected. Income rose 0.3%, less than the 0.4% that was expected. Food and energy prices were up, which took a bite out of disposable income. But the Fed continues to insist that this is not an indication of inflation, and that's serving to keep investors focused on earnings and valuations. Now, we can clearly see from weaker disposable income that energy and food prices are having an effect. It's reasonable to assume that spending might have been stronger were it not for higher food and energy prices. But notice that gold prices are somewhat stalled. And oil prices clearly have a big "fear premium" included. And with oil prices down sharply today, we may not be far from seeing a little relief at the pump. *****Here's an inflammatory headline for you: CNN Money says "13% of all U.S. homes are vacant". Maine topped the list with a 22% vacancy rate. Vermont has a 20% vacancy rate and Florida is at 17.5%. But wait a minute: these states all have a large amount of vacation homes. Strip those out and Maine's vacancy rate is really around 7%. Even Florida has a 10% vacancy rate. Nevada, among the worst in the country, is around 11%. The reported 13% vacancy rate today compares with a 12.1% rate from 2007, before the financial crisis. So while we know the housing market is in bad shape, it would seem there are some who are intent on making things sound worse than they are. | Special opportunity, article continues below.
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| *****For a little color on what to expect from stocks, here's Jason Cimpl, from TradeMaster Daily Stock Alerts. If the bulls were to take it out, we could expect a test of 1335 resistance - which is the big number to watch this week. If the bulls can take out S&P 500 resistance of 1335, we are likely looking at a rally to new highs by next week. Also, as important to as it is for the bulls to test 1335 this week, it is similarly important to defend 1280 support. If the bulls lose 1280 this week, they are setting themselves up for another test of 1250 support - and the next time that skirmish happens I think the bears win that battle. But this time, unlike last time, I favor a break out to the upside. Jason has been a very reliable indicator. He called the drop to 1,250, and the bounce from that level, perfectly. I don't think he has V.C.U. in his Final Four for the NCAA Men's Basketball Tournament, but other than that, his predictions have been spot on. *****With earnings and cash approaching record highs, companies on the S&P 500 are raising their dividend payments to shareholders. Dividend payments are on track to his a record $31.07 a share by 2013, according to the well-respected research firm Birinyi Associates. You can get some of my top paying dividend stocks, including 10.8% and 8.6%, click HERE. Until tomorrow,  | Ian Wyatt
Editor
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