The chart above shows the US dollar ETF (UUP), which tracks the direction of the dollar relative to a basket of other currencies. You can see the long slide that the dollar has endured, but this has coincided with a rise in the stock market.

For the last four days, the dollar has been bouncing, and that has weighed on stocks, hitting the energy and materials sectors especially hard. It may seem counter-intuitive, but in this environment stocks rally on the weak dollar and pullback when the dollar is rising.

Yesterday, the market sold off fairly hard, but one stock that stayed in the green all day was Apple (AAPL). The chart above shows the recent stock action, accompanied by a huge volume spike, as well as the long uptrend. The gap higher on Tuesday was the reaction to the company's blowout earnings report. I covered the earnings conference call for TheStreet.com Monday night. Here is a copy of my comments:

"Apple reported a true blowout quarter. When the headline first crossed the newswire, I mumbled "wow." That's how surprised I was by how much the company surpassed consensus estimates.

The chart above shows the strong breakout in gold. This is actually the Gold ETF (GLD), but it tracks gold prices very closely. You can see the strong volume spike yesterday as gold broke out convincingly above recent resistance.

Gold has been strong in conjunction with the weak dollar, one of the primary factors in the recently rally. There is a lot of chatter about the weak dollar, and central banks around the globe trying to diversify their dollar holdings and boost gold reserves.

The chart above shows the strong breakout in gold. This is actually the gold etf (GLD), but it tracks gold prices very closely. You can see the strong volume spike yesterday as gold broke out convincingly above recent resistance.

Economists missed the jobs estimates by a wide margin Friday morning. The nonfarm payrolls report showed the economy shed -263,000 jobs in September, far more than the consensus of -175k jobs.

This is a disappointing number for investors. We need to see the number of job losses continuing to decline. That plays into stronger consumer confidence, and strong personal spending, which is the biggest component in the GDP calculations (consumer spending accounts for nearly 70% of GDP).

Economists missed the jobs estimates by a wide margin this morning. The nonfarm payrolls report showed the economy shed -263,000 jobs in September, far more than the consensus of -175k jobs.

This is a disappointing number for investors. We need to see the number of job losses continuing to decline. That plays into stronger consumer confidence, and strong personal spending, which is the biggest component in the GDP calculations (consumer spending accounts for nearly 70% of GDP).

Although it is mostly a slow news morning, as well as a Jewish holiday, there was a flurry of M&A news before the bell:

• Xerox (XRX) is acquiring Affiliated Computer Services (ACS) for $6.4 billion;
• Abbott Labs (ABT) is buying Solvay's pharma business for $6.6 billion;
• American Securities is buying GenTek (GETI) for $38 per share.

The stock market is getting a nice boost this morning, after a big down week last week. I suspect that some of this buying is window dressing related to quarter end on Wednesday. Tech stocks are up strong, led by semis, but all 10 S&P sectors are participating.

The market is continuing its stair-step higher, after some upbeat reports hit the wires past Friday morning.

First, FedEx (FDX), which is considered to be a good barometer for the overall economy, raised its earnings guidance and said it's seeing signs of improvement in the economy. Also, the Univ. of Michigan consumer sentiment survey rose to 70.2, up strongly from the 65.7 reading seen in August.

There isn't much in the way of market moving news this morning. Our markets are lower, mostly taking their cue from overseas markets, which sold off again overnight. Shanghai fell -4.3%, with Hong Kong and Japan lower as well.

We got some solid earnings reports from Hewlett-Packard (HPQ) and Deere (DE), but they aren't having much effect on the market. That said, so far this pullback has again been rather mild. I'm not saying it's over, but given how overbought the market had become, I'm sure the bears were expecting a sharper correction.

The National Association of Realtors (NAR) released its quarterly metropolitan home sales report yesterday, and I found some bullish undertones in it.

While most people are focusing on the continued large year/year price drops, I have not heard anyone focusing on the fact that most cities showed sequential (qtr/qtr) price gains for the first time in roughly 2 years!

The market is ripping higher this morning on the combination of heightened skepticism among investors that the market was overbought and in need of a pullback and the better than expected jobs report.

Nonfarm payrolls declined -247,000, but this was much better than the -325k that economists were forecasting. Also, the unemployment rate ticked down to 9.4% vs. 9.6% consensus, and I heard many whisper numbers that it would actually rise to 9.7%.

The market is ripping higher this morning on the combination of heightened skepticism among investors that the market was overbought and in need of a pullback and the better than expected jobs report.

Nonfarm payrolls declined -247,000, but this was much better than the -325k that economists were forecasting. Also, the unemployment rate ticked down to 9.4% vs. 9.6% consensus, and I heard many whisper numbers that it would actually rise to 9.7%.

The economic data released this morning was better than expected, especially in the housing sector. Pending home sales for June rose +3.6%, which handily exceeded expectations for a 0.7% increase. Moreover, this was the 5th straight monthly increase for this datapoint.

I apologize for not updating my blog yesterday. I was out of the office at a conference and did not get a chance. Fortunately, it was a pretty quiet day. The biggest news was Goldman Sachs (GS) earnings report, which I covered for RealMoney.com. I will post my comments from the conference call later.

This morning, the stock market is getting a big lift from the likes of Intel (INTC), whose better than expected earnings report is helping to boost sentiment among investors. The semi index (SOX) is up +4.5% on the news, which included strong gross margins for the company, and also and upside revenue forecast for next quarter, which is nice to see in this environment of uncertainty.

The market is trading lower this morning after the Michigan Consumer Sentiment index dropped to 64.6 in July, versus consensus for 70.0. This datapoint seemed to move the market more than the U.S. trade data that came out, and showed the trade deficit fell in May as exports picked up.

In corporate news, GM (GMGMQ.PK) is exiting bankruptcy after just 40 days, with a new corporate structure and improved balance sheet. Financials stocks are lower after the WSJ reported that firms looking to buy back the warrants held by the govt. are complaining the Treasury is demanding too high a price. Also, there is chatter that CIT (CIT) may not be able to get FDIC backing on its bond issuance.

I have heard a lot of market commentators complaining lately about the daily volume on the major exchanges. Their argument is based on the notion that the recent rallies have not been accompanied by strong volume levels, and as such the rally attempts are suspect.

The ECB and BoE both left their benchmark interest rates unchanged at 1.0% and 0.5%, respectively. The Wall Street Journal reported that home prices in the UK rose +2.6% last month, which marks their strongest monthly gain in more than six years.

If you look at UK home prices vs. the US over the last several years, you can see that the price patterns in the US lagged that of the UK, both on the upside and on the way down. So is it possible that a nascent rally in home prices across the pond could precede a bounce in home prices here in the U.S.? Talk about something that would lift the markets higher.

The S&P 500 rallied hard yesterday, outpacing the Nasdaq, and managed to close above its year-end 2008 levels (903.25). That puts the index in positive territory for the year (+0.44%) for the first time since January 8th.

Here is a quick summary of yesterday's action: