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Intraday Market Notes -- July 31

|Includes:FRME, HOPE, Heartland Financial USA, Inc. (HTLF)

3:35 pm ET: Arrggh! I lost my post for the second time in a week! Okay, I'm not going to repeat the entire thing and will instead give the stripped down version: Market drifting ahead of FOMC rate decision tomorrow. Although movement in the major averages is muted, there is an intense struggle going on behind the scenes between the bulls and the bears, and for good reason. Both have a lot of grist to grind:

Bullish grist: Rising consumer confidence (over last month), rising wages, improving housing market
Bearish grist: Continuing Eurozone worries, uncertainty over Fed QE policy, increasing concerns that unemployment may be rising (we'll know more on Friday), uncertainty over the Presidential elections (Romney=good for the market; Obama=bad for the market)

Tomorrow's rate decision could be a market mover as well as Friday's jobs numbers.

Trade Note: Regional banks still rallying
Regional banks have been rallying steadily for the past ten months. Some of the best of the best (technically and fundamentally speaking) are Heartland Financial (HTLF, $26, P/E=15), First Merchant's (FRME, $14, P/E=19, D/Y=0.8%), and Wilshire Bancorp (WIBC, $6, P/E=8). These stocks are all making new highs today with Heartland rising a whopping 11% on record earnings. First Merchants has been on my subscriber Stock of the Day list since 3/21/12 and has risen nearly 20% since. Note that it's the only one of the bunch that pays a dividend but on the downside, it does sport the highest P/E. Still, a lot of its stock is being held by major institutions (as is Wilshire Bancorp's). A continued improvement in the US economy should be good for growth in the regional banking arena.