Last week's season premiere aside, here's what I took away from Thurs, Friday and Today:
(1) The market is searching for a catalyst to go lower. That catalyst may well be found in economic reports this week which are expected to show continued growth but at a slower pace than previous months. Bulls could take the 'growth' story to sustain the rally but bears will attempt to take the 'slowing pace' story to counter the fast market move we've seen up to 1140.
(2) The market is truly weak on both sides. The bulls gave up the 1130 support level without a fight, and then the bears gave back their win the next day when the mark jumped 2% on news the recession had ended 14 months ago. Seriously? Both acts were weak imposters of true market conviction.
(3) The market rolled over today in the final 15 minutes of trading and appears weak heading into economic reports this week that are expected to be less than positive. No more "housing rebound" reports to boost stocks, and the "double dip is over" rally can only last so long without actual growth.
(4) The 2% rally last week was largely a results of low volume and short covering. However, absent really bad reports this week, I'm not sure the bears can muster enough conviction to generate a new wave of short buying that would cause the market to go below 1130.
(5) The market is getting excited about upcoming elections and has a feel of melting up all the way to a Republican win of the House and/or Senate.
Here's to positive economic reports that surprise and avoiding a slushie in all our faces.
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