Almost everything on the market today answered yesterdays “ coming around?” question.   All we wanted was to for the market to stabilize and not display the wild gyrations we’ve seen this short trading week.  Instead,  we got more of the same volatility answering the suspicion that Wednesdays bounce was nothing but short covering.    Despite some earning bright stars this week in IBM and AAPL after mkt close,  the mkt got stunk by an early wake up call from an unexpected source (MSFT).   

Talk about something getting in your cereal and causing a sale sign to go up on everything by the opening bell.   As bad as MSFT was,  you have to read over CNH’s  report (Alert sent out on machinery sec) to see how '09 is shaping up as for this sector.    Besides the big miss,  the company did not provide any 2009 EPS guidance,  which is a negative in our view and a sign of the uncertainty in 2009.    Negative follow through extended to CAT  (reports Monday), MTW, TEX and ag’ equipment like DE and pure infrastructure stocks like JEC, FLR got rattled from the bell as well.   Besides noting a short in the machinery sector,  we were jumping off and turning on Education stocks (ESI, APOL ) at their highs.   This is a place we’d usually be adding to positions in the past,  instead , we slanted to the downside thinking breaking out successfully in this environment maybe a useless proposition.   Of course,   we still like this safe sector and these earnings winners,  but we’ll wait for a pullback to come back long and attempt a breakout.  After holding all day during the market declines, they succumbed some finally into the close.

As far as the mid day rally, what rally really?.  It lasted 1 hour and probably was nothing more than another short covering attempt.    In a short covering rally, you don’t have “whales” buying.   There is no institutional buying Wednesday or today from what we are hearing.   A blink of hope was given by GS, JPM during a Financial slide of nearly 6% on the day.   Insurance firms took brunt of the punishment today.  

This is a confused market,  let’s hope GE doesn’t say something too negative going forward in the morning to add to the downward pressure coming from every sector today.    It’s very much a technical market, so keep eye on 800 SPX area as most important level now, we’re nowhere close to the 50ma .