Ahead of the open, (22-02)

While the broad market may have cheered the latest Global easing from China by coming within a whisker of May ’11 high  and closing higher for a third consecutive day, it’s underlying market was hardly pretty. Ahead of last Friday’s open, cited..” Only caveat today is RUT related, although the small caps outperformed the other major indices, momentum names and earnings plays only tacked on average par gains to the RUT….”.  On the first trading day of the week, instead of single small cap stocks catching up and outperforming, they underperformed leading the broad RUT to a .7% decline.  Also, rally beta leaders (ie.SMH,(a 2nd straight negative day), homebuilders underperformed the broad market signalling another possible shallow pullback for the market.   It seems every ~20 SP handles or so the market decides to consolidate, digest.  Although, window dressing should help avoid anything more than a shallow pullback into March, what happens post-LTRO less world may get investors looking ahead, offsetting any more upside caused by the dressing phenomenon.  Still, that being said, come March, markets will also want to position ahead of the next NFP#, which could be another robust one following last week’s claims (Thursday claims may fuel this idea further).

The HSBC China ‘PMI’ was okay and so was the European February manufacturing PMI’s, although a tad off expectations.  It won’t be enough to buoy the markets, but aren’t a concern as last month’s jump needs to be digested as part of the European ‘stabilization’ seen into 2012.