Data suggests an uptick in inflation, the Fed declares double digit unemployment is looming but...according to the central bank the U.S. economic is predicted to shrink between 1 and 1.5% this year, and improvement over the previous 1.3 and 2%. The markets may have celebrated today, and we may even get a little more follow through tomorrow as the last of the bulls are suckered in and the bears squeezed out but I have a feeling that there will be some buyer's remorse in the coming days.

According to the Fed's minutes of the last FOMC meeting, it could take five or six years for the economy and the labor market to fully recover. However, for 2010 they expect that the economy would grow between 2.1 and 3.3%, instead of the previous expectations of 2 to 3% but I don't think that anyone is going to change their overall investment strategy for a few tenths of a percent.

Inflation is beginning to poke its head up, but the signs are still relatively minor. Nonetheless, the Fed worries that the public will begin to fear inflation in light of the Fed's recent policy of purchasing its own Treasury securities.

Today's rally began on the open of electronic trade on Tuesday evening following an upside surprise in Intel earnings. However, traders were already in a good mood following solid numbers posted by Goldman Sachs.

We really didn't expect the markets to rally this far, this fast but I don't think that anyone really could have predicted such a move. However, we seem to be near significant resistance areas. We think that 930 is critical for the S&P and feel as though aside from the possibility of a moderate overflow of buying into tomorrow's session, the near-term highs are looming. We are looking for a pullback with 916 and then 902 as our support levels. Dow traders may look for a correction that could result in prices near 8,300 should support at 8,420 fail to hold. The Russell on the other hand, looks like it may have a little more room to move on the upside than some of the other indices. We don't see significant resistance until the 520 area.