Moderate Sell Strength Today

Indexes on the run today chased by GE news and for failing to get beyond the one big rally day of April 1st. Look for bears to spin today's price action and for the bulls to hold onto the base building takes time story. A look at internals shows moderate sell strength on the break and a VIX that could only rally a buck fifty. All points more to sideways to slower markets as prices work through current config.

GE

GE putting pressure on markets this AM with bad earnings. Sell strength is moderate/strong as of this post with indexes readying a defense of April 1st rally. VIX will get a pop early and may have a rally if the bale whistle blows, but vol will be short lived.

Leaking Vol

April 1st was the biggest mover of the month and since then the volatility has been leaking steadily. The bearish attitude about the economy in general and real data indicate the bulls may have to wrap their argument around a slow evolving base. Technical indicators still without any push either way.

Hedge This

Reports still flow in about the bad performances of the super hedge managers which really began in the third quarter of last year. Once again, the story is about a group of eggheaded PhD'd non-traders, crushed by illiquid strategies that were obviously not as correlated as they thought with positions the size of a mountain range. Monkeys with darts could utilize the same office space and claim the paper on the floor would be worth more than the paper these geniuses bought. The truth is these guys got tremendously greedy and lazy as they made markets with theoretical constructs in order to carry massive positions in pursuit of alpha. What a joke. Big fails and real big fails every time.

Bull/Bear Stall

SP500, DJI, and NQ100 have stalled over the last four closes after the big rally of April 1st. This will play into the bear's hands for at least a scare since the only action of the last few days has been 2Q pricing by funds. Spec action is being seen primarily in tech stocks as there is noticeable caution over the broad market.

Direction Uncertain

Indexes looking to close over the February highs for some sign of strength as the attempt to complete a yearly bottom continues. Model internals still without much bull or bear strength and trade could easily turn to a strategy of being patient and fading the week's general direction.

Offsetting Bad Paper

Job number was negative but market will slug out direction with a bit more upside resistance in place. There is some pricing going on in the indexes as the second quarter gets underway and it will be determined if the current support fades once the pricing is completed. Program technical internals weaker this AM but could easily turn into strong negatives.

Yesterday's hearing on the JP Morgan/Bear Stearns intervention indicated an effort to avoid some sort of meltdown in the markets at the time but merely conjecture no data. Collectively the panel has as much knowledge about markets and market making at the dopes who leveraged themselves into disaster. What is known is there is still a ton of bad paper on the books with an economy that has weakened to the point where economic productivity may not offset the situation for some period of time. Not good for the overall markets.

Deal Details Coming

Hard for market to go anywhere today, not because Bernanke dropped the R word, but rather because he told the Senate panel that the particulars regarding Bear Stearns would be discussed on Thusday by the larger group of the bail out participants. He admitted not being to versed on the every facet of the bargain give away, which seems a little disconcerting but not a surprise. Market will have to listen to the explanations tomorrow and figure out the important parts.

Ben's Stock Picks

Solid rally today gives the rounding bottom club a sense that victory may be at hand in the ever struggling war between up trenders and down trenders. The long suffering NQ100 took out seven weeks of highs and the SP500 took out the last 4 weeks. Declaring a jubilee on the indebted, the Fed has saved the world, as Wall Street has come to know it, and now much glory can be praised on Mr. Bernanke. First however, he will have to endure congressional questioning tomorrow as to how the Bear Stearns deal came about. The idea of Ben nervously agreeing with the big shots is not to hard to imagine with the JP Morgan suggesting a BSC per share range of greater than zero but less than 30. Then someone whispering in the Fed Chairman's ear and he then asking all around, "how does two dollars a share sound?" Meeting adjourned.

Morning Rally

Indexes will attempt to sustain a rally again with the DJI and SP500 already taking out last week's lows. Belief is Wall Street has gotten what it wanted out of the Fed and bulls think the worst is probably over on write downs. Bears thinking lending curbs will cut-off upside for sometime to come and bear market has some distance to travel. Moderate buy strength this AM