During the last quarter, one of the best performing sectors was homebuilders, such as Pulte and Ryland.  Last week, Jamie Dimon, CEO of giant JP Morgan, said the housing sector had hit bottom and was improving.  Yesterday, the Builder Sentiment Index rose to its highest level since June of 2007.  This morning, housing starts were down, which helps to clear the supply of competing foreclosed homes.

Since most economists agree that a vigorous economic recovery is not possible until the housing market stabilizes and turns around, this could indicate the U.S. economy has indeed found a bottom and the recent bull rally is sustainable.

Now, if only Europe would find its bottom . . .