Signs of optimism lured me back

I re-entered the market Monday, taking small, equal positions in several ETFs that would give me a broad exposure to the market.

I'm not suggesting we're out of the woods yet by any stretch of the imagination, but some things seem to be encouraging.

The rally that took place during most of last week, whether a bear market rally or not, seems to be holding up. Today's close that pushed the Dow up more than 100 points in the last hour of trading was a nice surprise as well.

A lot of people have said that the current rally in financials is fake, and will not hold up. But I think the fact that Wachovia (WB) and Regions (RF) both announced they were cutting dividends to help shore up capital is a welcome sign. Wachovia also said it would not sell additional stock to raise capital, but would instead work through the credit crisis without an infusion from shareholders.

Yes, non-financial businesses are missing their earnings marks, but they were widely expected to do so. I've heard many a financial expert say that the beginning stages of the recovery from a market bottom happen when the bad news is still flowing. Don't know if that stage has begun, but don't want to miss it if it has.

The ETFs I entered were State Street Global Investors Financial Select Sector SPDR (XLF), SPDR S&P MidCap 400 (MDY), SPDR S&P 500 (SPY) and Dow Diamonds Trust (DIA). We'll see how it goes.

Brian