This is a very interesting, and potentially important, day. There are a lot of reasons to sell, not a lot of reasons to buy...and the market is rising to the highest levels since January. What is going on?

I have been grousing for the past 24 hours that we have been in a time warp for the past couple days, back to March headlines:

Dollar weaker
New highs for heating oil, nat gas, oil
Energy, materials outperform
Financials faltering

So why are we getting this slow, modest, midday rally? Traders are divided here, but the most common answer I am getting is that traders are getting more comfortable with taking on more risk. There are several reasons for this, but the two most important are a belief that: 1) the U.S. economy will gradually improve in the second half of the year, and 2) the Federal Reserve has essentially provided a backstop with the Bear Stearns bailout.

Both of these are rather bold assumptions, and may prove wrong, but there is clearly a class of traders (a minority, but enough to move the markets: call them "first adopters") who are willing to make the bet here. And you can see it in the VIX: again sitting at the lowest levels since October.

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