PreMarks 09.27.11

Stocks are looking higher on a belief that there may indeed be some road to resolution to the European debt crisis.  The threat of a government shutdown being averted probably helps today.  Hard to know whether we are really at the end of this nonsense or whether there is one more shoe to drop.  I do know that we were oversold enough in the shortest term we measure yesterday to rally.  I do know that by most metrics stocks look cheap right now especially when measured by yield.  If we don't go into a recession or slow down next year then stocks look really cheap on a 12-18 month basis.

One more thing.  Don't underestimate the pull of both the month's end and the end of the 3rd quarter on stock prices the rest of this week.  A big open like this will likely bring out sellers at some point during the day.