Into the trading week, (April 16- )

Quite fittingly Friday’s flop of slop market losses put the week into perspective. Every trading day last week, including an overnight session was ugly for either a Bear or a Bull. The SP market may have finished 2% lower, but daily volatility in both directions likely didn’t make anyone a big winner or loser. Thursday’s close was strong, Friday’s was ugly. It was no coincidence market looked like it was aiming straight for SP 1370 the last hour, the SP 1370 importance was noted into Wednesday’s trade, “Market needs to close over SP1370 by weeks end or this could be a prelude to a longer corrective phase as technical damage will be present”.  Guess, getting above and holding that mark saved the week, but that's little comfort for investors who don't invest on technicals.

“It’s hard to know how many real longs are into this to get past SP1400”.  Friday’s action pretty well clears that question up. It was a week long fast traders market with most of the action in ES/ETF’s.

A look at your Shadolwlist/watchlist (below) will likely confirm investors are not dumping stocks, instead just watching Spain standing aside with caution. Again, will bring up GOLD and the fact it’s not being seen as a safe haven, if systemic fears are prevailing over Spain.

Last weekend’s, “Into the trading week”, was broken down in the order of Europe, China, U.S eco’ data and earnings. That’s pretty well how it played out in market importance. The European havoc this week almost makes you forget we just had a holiday weekend and an NFP# trade to deal with early in the week.

As far as Friday’s action, China GDP not only missed the 9 handle whispers, but slipped to just above an 8 handle at 8.1%. Still, it was not really a market concern b/c all important March #’s inside(IP , retail, loans) recovered and improved signalling a pick up. (Jan/Feb growth bottom likely with a 'hard landing' off the table(again). Also, it triggered more RRR easing expectations.  Resource stocks in Europe were acting fine in EU early on.

Instead of China, markets were back focusing on Europe/Spain. A few days ago after an overnight upside gap...” Judging by the covering bounce, the market will be back to chopping around intraday, overnight on Europe ‘comments’ as was the case for so long in 2011 until yields stabilize.  It’s a pain, but it does make shorts eager to cover on each ‘calming’ story. This should bring some stability, support for the market as soothing comments are upside risks to shorts. Unfortunately, the first thing you look at in the morning is where the Spanish/ Italian 10yr yields stands. Unfortunately, the ECB calming and setting fears into the Bears had worn off after a few days with a 30 SP handle reversal. The morning story was ECB loan data. Spain hit the ECB liquidity for nearly double the February amount = popping yields closer to 6% and no ‘empty’ ECB comments could have done anything today. The only ECB comment, ”we see stabilization in sov’ debt market and will act when needed” was like shooting itself in the foot as yields were coming in on 6% again (hit 6% later before easing off end of day). You can’t fool a Bear with the same tricks over and over again. All in, Market wants intervention as it has little faith in Spain dealing with its problems ‘alone’ since PM’s budget comments triggered a bad auction to ignite this week ..” a poor Spanish bond auction (yields now up to 5.7%) was a test gone bad on their budget proposal and we were back to Eurozone blow up fears”. Apr. 4th Upcoming week all focus on bill /bond auction go 17th /19th and Draghi on 17th as well.

US eco’ data, noted it would be a quiet week and what was relevant data was mixed. In all, no hard signals for economy rolling over post NFP#. Market decided to give benefit of the doubt until more data.

Earnings, if Spanish auction go off decently and relieve some stress, then ‘earnings’ may become the positive spin to the market. Amongst all Spanish hoopla, better than expected earnings were being ignored. It’s understandable, but we can quietly add SHW, CP raising # and even a few foreign names to those already noted reporting positively. This doesn’t even have to do with, “low bar set (-2% in sequential earnings) earnings around the corner”. These are just good reports!. The pre-announcements in tech is where the low bar might play out.  LLTC, the stock we always use as a barometer to start tech earnings is on Tuesday. In all, industrial are coming v.good, financials are off to a decent start and now tech gets going. The market will know and come to a conclusion very shortly what the trends are ahead, it won't take a month’s worth of reports. At first glance, it may not be as lacklustre and messy as anticipated.

Shadowlist- 50- 50% split of stocks in black/red on 2%SP downside week.