Forget bulls and bears, today's market action is all about the monster, a red one named Elmo.

Before you click out of my post in disgust, here me out. Elmo viewers, like my 19-month-old son, learn that anything is possible provided that you have a good imagination and some simple art supplies. Another word for this is self-fulling prophecy.

When it comes to investing, sentiment comes in waves. When times are good, Wall Street analysts trip over themselves to come up with superlatives to describe the wonderfulness of the market. They then kick the market as it goes down and stays down. Then all of the sudden, pundits start arguing that things are not as bad as they seem, a phase that we are in today.

"Analysts say the stock market has been struggling in recent days to adjust its economic outlook, with some experts increasingly optimistic that the U.S. can avoid an outright recession," The Wall Street Journal says. "On the other hand, many remain nervous that the economy will suffer a prolonged bout of weak growth that might feel to many Americans like a recession even if it doesn't fit the technical definition of one."


Both factors seem to be contributing to the gains in the Dow Jones Industrial Average and the big moves and the S&P 500. The Nasdaq Composite Index as trading down at last check.

Wall Street broke out its rose covered glasses as analysts boosted their ratings on a plethora of stocks from Union Pacific Corp. (NYSE:UNP) to Texas Instruments Inc. (NYSE: TXN). Analysts at Goldman Sachs added Amazon.Com Inc. (NASDAQ: AMZN) to its "conviction" buy lists and raised their six month price target from $98 to $75, according to The Journal. Shares of the largest Internet retailer soared.

Of course, shares of Yahoo Inc. (NASDAQ: YHOO) rose on the news that Microsoft Corp. (NASDAQ: MSFT) had restarted talks about joining forces short of a merger, at least that's the case for now. Furthermore, there was some positive economic news as Bloomberg News noted "The index of leading U.S. economic indicators rose in April for a second month, the first back-to- back gain since October 2006, signaling that the current slowdown will be short-lived."

So remember investors that Elmo loves you even when the market acts like Oscar the Grouch.