Jack Bouroudjian
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The market opened up yesterday morning with a bang. One of the reasons for this is the $1.3T bailout package they’re talking about over in Europe, which would take care of much of what’s ailing their sovereign financial institutions.

I’ve mentioned quite a few times that the Europeans have slowly been moving from denial to acceptance, but this bailout package—if they can get it done—really tells me that the pendulum is swinging in the direction of a more stable European Union.

Meanwhile, earnings continue to be positive. As I mentioned on CNBC’s Trader Triple Play yesterday, of the 15-20% of the S&P 500 companies that have so far reported, 70% of them have beaten the Street. I’ve said it before and I’ll say it again: the lowering of expectations was too low.

People were pricing in Armageddon—a breakup of the EU and a double-dip recession here in the States—but it never arrived. So, as investors, what should we be watching now?

As I write this, the market is getting into a wicked resistance area. I say wicked because that’s what it was when we took it out on the way down, so that’s why I’m paying close attention to it on the way back up. Let’s see how the market treats the 1235 level in the cash S&P (around the 1231 level in the front-month S&P futures contract). If we can work through that and stay above it on a weekly basis, look for this rally to continue.

Strong earnings, a more stable Europe and a Chinese economy that’s loosening the reins are key ingredients for a very nice time to be in equities. Pricing in a 2008 that didn’t happen has created a gem of opportunity, so hopefully you listened to me and had your wish list out (and did your own homework) while the rest of the world was sitting on the sidelines.

If you did, you’ll be sitting on a nice lead in your position as all those non-believers rush in, chasing returns and yield before the end of the year.

Right now those non-believers are hoping, wishing and praying that the market stalls out. But as I told my pastor at our church’s finance committee meeting the other day, when it comes to the market, there’s no hoping, wishing or praying allowed. You have to watch what’s happening and react to it.

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Jack Bouroudjian

H. Jack Bouroudjian is Chairman of Bull & Bear Partners, a financial services holding company. He hosts the syndicated radio program “The Jack B. Show,” (www.thejackbshow.com) is a regular commentator on CNBC and the author of “Secrets of the Trading Pro” (Wiley, 2007).