"The Worst Is Over"

"This rally continues," Steve Massocca, of Wedbush Morgan Securities, told CNBC. "It's pretty clear that the worst is over for the economy right now."

The stock market rallied again today, setting the stage for the eighth consecutive week of market gains. The market started the day strong as Pending Home sales increased by more than 3%. Among other positive news: AIG said it doesn't need more money and construction spending rose. On the downside, more consumers were late on their credit card payments. Continuing unemployment claims are seen increasing.

Interest rates responded less enthusiastically to strong market sentiment and drifted sideways to the trendline. As I suggested this morning, it's possible to see a fallback to the four week moving average at the 3.04% but several attempts to break rates below 3.15% failed. It appears that rates may break higher tomorrow.

More to come in my morning report.