...and the Oscar for 'Editing in a Rally' goes to.......CNBC and Charlie "Bull-father" Gasparino!.   We definitely have to put this in the comedy department, the only drama was for the Bears running to cover their steps.    As comical as this timing of the Friday rumor was, it only emphasized the craziness of this market and its dependence on news and the daily fear that is in the Bears.   This market can be turned on a dime, it just needed the right touch from those wanting to see this market hold on as long as it can.    It definitely didn't look good in the afternoon and had all the makings for a rough Monday.    Some say its in the charts and after almost two full days of a slow grind down, we noticed the IWM ( a measure we use during the day) had started to base and reminded us of the Friday before when the Financials led a charge up.   Is it..was it a coincidence the IWM based nicely before the CNBC 3:30 episode?.   Maybe, but if it is in the charts it definitely gave enough clues this time before the rally into the close.    Not everything ran, the techs and momentum stocks hardly participated.   The ones that did were GS for 6 points and MER for 3 as we had expected if a half ass rally of any kind ensued.   It had to be led by the financials as there is nothing else that could do it these days intraday.   These are usually the bets in our books, we prefer to sit out the MBI, ABK stuff.    So instead of a potential scary Monday, we had the futures up overnight with the world markets seeing green setting up for possibly a decent open in North America.  This comical event has the ability to turn into a drama,  if it does it would have to be some concrete news from the insurers and it could be enough to fuel a day or two of a rally.   Unfortunately, what we need to do is watch the plethora of data on the economy this week and therefore not get carried away in holding too many or too big of slices based any insurer noise.   Here's the potential goodies on the Bears :

http://www.nasdaq.com/econoday/calendar/US/EN/New_York/year/2008/month/02/day/25/daily/index.html

If by some remote chance we see anything of good news in the economy data, it will make the Bears scramble and we can have a rally based on something more reliable.  The subprime, insurer stuff will only give us a reprieve for a short time, the eco data is the crucial ingredient for a true reversal to start.

In the meantime, we need to be ready and know what to go after if a deal goes down!. We'd start with the financial stocks that work and only after some time would we go after the usual suspects in the momo world of the fast techs, shippers, solars etc.  We need confirmation of participation by these players this time around, we didn't get it Friday.   Stay cool this week, it should be quiet turbulent.

Remember..Futures lie these days and it works both ways.   A flat futures premarket may not tell the tale this morning.  Too many are thinking deal here and we may only start to see this it after the open intraday.