Stock index futures are on the rise after two losing sessions after well-known investor Warren Buffet (a.k.a. “the Oracle of Omaha”) took a $5 billion stake in Goldman Sachs. He also gave his support for the $700 billion financial bailout plan now being presented before Congress by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke. In a CNBC interview, Buffett said it was clear to him that action is needed, and that his stake in Goldman was a vote of confidence that some portion of the plan would pass.

December S&P futures were last up 2.25 at 1189.25.

Paulson and Bernanke continue their second day of Congressional testimony to quickly push through the $700 billion financial bailout plan. Legislators raised questions about a number of issues, including oversight of the plan, relief for homeowners facing mortgage-related meltdowns, and possible caps on financial executives’ pay.
 
Lind Plus Senior Market Strategist Jeff Friedman said the more questions that have come up regarding the plan, the more negative it seems to be for the stock market. “Expect volatility…Watch for wild cards from the dog and pony show going on in Congress,” he said.

December S&P futures closed lower on Monday and Tuesday, but despite the setback, Friedman said technical momentum indicators, the Relative Strength Index (RSI) and Stochastics, remain bullish and signal sideways to higher prices. However, he said multiple closes above the 20-day moving average at 1242 are needed before he can feel confident a short-term low has been posted. He said 1136 is a longer-term downside target, but there should be support at 1186 first. The 10-day moving average comes in at 1217.