This rally has been really impressive. The S&P 500 is off less than 3% this year as of Thursday’s close, hardly a blip considering all the angst earlier this year and late last year. I think the largest reason for the rally has been that earnings have exceeded expectations. According to Ned Davis Research, the median gain in 1Q08 earnings for the 90% of the S&P 500 that has reported is 9.1%. It is true that overall earnings growth is negative, down more than 15% in fact. However, NDR tells me that according to Zachs Investment Research, financial sector earnings are off 80%. Thus, the median figure is a far better indicator of the health of corporate earnings in 1Q. Add in the facts that guidance has been decent, expectations for 1Q and the rest they year had been low, and the economic statistics while soft have generally indicated stronger than expected growth and you got the ingredients for this nice rally. Will it last? Will the rally push higher, above the recent top end of the trading range? I’m not sure but if it does, I don’t think it will be by much. I don’t see catalysts now that earnings are done and I think the bears will press if given the opportunity.