The second quarter of 2007 has started off with a bang. It is typical to see buying interest in the market during the first couple days of a new quarter, but the real question is "will the buying continue?" This, of course, can not be answered with certainty. I have a "moderately bullish with caution" sentiment on the current market environment. There are several elements in play that could quickly throw this market into a rut.

Just to name a few:

1. Escalation in the situation with Iran and Britain
2. Bearish Employment data in Friday's Employment Situation report
3. Another higher than expected inflationary data report
4. Data indicating a "trickle down effect" in regard to the sub prime situation
5. The list goes on, but the fact remains the U.S. economy is still in good shape.

One final note: This Friday the market is closed. Employment Situation data, Wholesale Trade data, and Consumer Credit data are all to be released on Friday. There may be some selling pressure late Thursday as a result of the increased risk of holding through a 3-day weekend with important data to be released during the market holiday.

Andy Swan is co-founder and head trader for DaytradeTeam.com. To get all of Andy's day trading, swing trading, and options trading alerts in real time, subscribe to a one-week, all-inclusive trial membership to DaytradeTeam by clicking here.