The market is off to a great start this week, powered by last week's momentum and further buoyed by a lessening of fears about Europe's sovereign debt. All the major indices are above their 50-day and 200-day moving averages, with the S&P 500 finally breaking out of the 1120 resistance level, closing today at 1141, a new 4-month high. As an interesting historical aside, the 1120 resistance level was first encountered way back in April 1998.

The ragged summer of 2010 is history, thank you very much, but despite an improved outlook for the economy, September drifted forward on very low trading volume last week, probably due to the holiday-shortened week (Labor Day on Monday and Rosh Hashanah on Thursday and Friday). The few economic reports we saw last week were positive, including slightly improved initial jobless claims, and the outlook improved for European banks.