Steady..

As speculated, buyers did not return the day after a big downside day.  To many this type of action is disappointing, but not here as it’s the expectation in the past year.   Also, we have to look at the underlying tape and see if there were any signs of stability appearing.  The little short covering in the morning was important due to the fact of where it was coming from (tech, momo’s, also yesterday’s silver lining) and within this group,  it was important to see CSCO in the green for most of the day after consecutive days of losses.   Ironically, our signal on NTAP yesterday reared it’s ugly head EOD and it seemed déjà vu’ once again as the stock got hammered 10%/halted and the shock waves hit the market.   The fact the market reversed back to the flatline is probably one more signal this recent “trashing has taken a lot of the downside out” and we can deal with the other market issues at hand.   We might be able to put this fear to the side until Q4 pre-announcements/ season starts in January. (away from NTAP, ARUN, which was a long standing DJIM in ’09 and SPRD  had nice EPS after hours).

Of course, one of the things at hand is the Irish turmoil and a little surprisingly is the fact ‘Cirque de Soleil” a.k.a (IMF,EU) was on it’s way to Dublin for a pub crawl didn’t get the market thinking something will be resolved shortly.  Still, this road trip is a positive and another non-tech underlying tape positive was the fact the pre QE2 trend was back (short USD/ TSY buying), which of course will help the commodity/China hike picture, if it lasts for more than just today.  It may carry over because the CPI number today suggests there will be no stopping Ben’s 600bln package and all can just shut up that want to stop it and allow the market one less worry that has appeared the past week or so.

One thing lost in the GM mayhem tomorrow to watch is the Phily Fed #, it would not be a surprise to see this number disappoint following the NY empire number (which suggested a significant drop in manufacturing activity to come) that was brushed underneath the rug last week.