Slow

All tech today on extremely light volume. VIX is now just above 20 which is either the sign that the bulls are right about the worst being over or that the bears are correct in claiming today's action demonstrates a slow downward pattern that will last for months. But the VIX may just be low enough now to signal a larger than expected sell-off in stocks is in the offing.

Bull Bear Politics

It must be the political season, but there seems to be a bit more partisanship between the bulls and bears these days. Each with their own data to support it, the long and short speak of either the continuation of the decades long upward trend in stocks or the emerging bear break. Billions have been chipped into the bull side as the Fed and Treasury seek to stem any systemic downside brought about in part by the failings of Wall Street and as a result are ironically helping to preserve an obscene compensation structure whose excesses helped create the credit disaster. From the broadcast market pimps to the insiders gaming earnings expectations, the spin moves across the globe daily.

The bears have taken on a buyside monster which has massive forces in reserve to keep raiders at bay. There chief argument that bottoms do not appear until time and capitulation have bowed everyman may be right, but appears weak because it relies on the broker's logo, 'trust me'. The bulls have been riding a horse since at least 1982 and have legions of fund managers and little folk as members convinced of their unquestionable trading prowess, as long as the market does not go down. Their skills and those of what appears to be a group of extremely frightened policy makers have dropped a dam of money into a price area identifiable as the current bottom. As to whether it will hold, no one knows. Continued bad job numbers with unwavering tight credit will create an environment tough to fix and another repricing event would probably take place at lower levels.

Bear Dreams

Well, like every great directional play, you get a couple chances to load up. For true bears, this is the opportunity to give the bulls some of this and some of that, laughing with hands turned out.
As the bears claim, and there are many smart ones currently, this market is not only no good, it is early in the no good. The bulls however claim low stock prices in certain sectors provide enough cash to reclaim bragging rights to the major direction of the market. Now, the bulls can win by working the sideways market over time. There are no such directional victories for the bears if they cannot repudiate these powerful rallies. Down means way down.

GOOG It

IBM on the close yesterday and GOOG today. The analysts that cover these stocks must get paid for being surprised. The bigger the surprise the bigger the better the payoff. They also must use the same system for measuring earnings as the brokerage firms use for measuring risks. This gaming of the expectations game plays on with the bulls and bears also. The bears believe the downside has just begun because, well, the break has just begun. What with the bulls getting help from every bureaucracy flooding the financial system with enough cash to make bad habits good, it is hard for the bear to get beyond down wave number one. Now they have to fight off GOOG tomorrow as the market tries to run up the hill while waiting for CITI numbers.

Range Test

Indexes under moderate sell pressure just before day session begins. They have been up in this territory a few times and failed each time. The Jan 15th highs for the DJI, SP500, NQ100 are 12777, 1427 and 1971.75 respectively. Close over those areas with some upside volume and a the base has been completed. Otherwise range bound action will prevail for months.

Great Joy

Great joy, all is well. The market will once again soar to new highs. There is nothing that can stop it now. New highs for everyone. Well, the bulls believe this anyway. The bears, and there are plenty, smell something burning and it is them. The gaming of earnings is being used to further any advances but what is new. Bulls have once again a great opportunity to move out the base area tomorrow.

Early Up

Bears on the run early with not a bad as we thought data from Intel and JP Morgan helping. Moderate buy strength indicates there are decent early sellers. Techs need to outperform on rally to confirm another leg for a bottom.

Hip To Be Bear

No question now that it is hip to be bear. Even the market pimps on the various market news channels who have shamelessly promoted everything on the buyside for years are convinced the darker side of the economy will prevail. Slapping the face of the overall market may be the analytical insight currently in fashion but it just may be that 'very bearish' will look more like 'very boring and sideways'. In almost every type of particular market downturn which has already been pounded repeatedly by the facts, the result is dull. This will be a challenge to the several trading operations such as the high frequency boys and steep trenders, but adaptive long haulers will find plenty to trade around.

Pros Ponder

Markets on the defensive this AM trying to find support as earnings begin to be announced through out the week. Seemingly a more professional trade right now with the greatest potential surprise being a substantial rally. Political landscape does not seem to offer much since the common view is that none of the candidates would be able to create anything as dismal as the current economic environment on their watch. Though that would be a bad bet. Ugly thoughts are keeping many trenders from stepping-in as the nagging thought of a some dark economic storm strong enough to rip into great companies, 'boomers' economic nest eggs, and all that is holy, has many thinking twice. Since thinking is not always good for Wall Street the following chant is always helpful; "Up is good, Down is bad." This the algorithm used by many of the leading stock market mavens before clicking on the confirm buy button.

Tired

The news continues to be lousy on just about everything a trader would think important and could get worse if the earnings reports this week turn out to be wanting. Downside action on Friday was deep on orderly liquidation but without strong sell strength. That does not make the bull feel any better but it could prove important if the market is able to turn around. Bears will aim for 1315.75, 1777.25, 12266 for the SP500, NQ100 and DJI respectively which are the April 1st lows.