Good morning and welcome back to the flickering pack.  After a freaky week of higher rates and whippy stocks, we power up our Monday pup to find the world awash in green.  Indeed, with Europe firm and Shanghai up a deuce, the bulls seem to be shrugging off the latest spate of market hate.

By now, you know the storyline.  The breakdown in global bonds— flagged in the 'Ville before the Bernanke spill—was the catalyst that shook the bulls from the "obvious upside" trade.  And given the broken levels in the S&P and banks, the ursine had room to run in the summer sun.

From a technical perspective, Friday's Snapper, while impressive, ran the tape into several key resistance levels.  The piggies (BKX 200-day) and trannies (TRAN 50-day) offer "first stop shopping" in level land ahead of earnings and below S&P 1527.

• Derivatives traded on global exchanges rose 24 percent in the first quarter to a record $533 trillion, the Bank for International Settlements said.   Factor in the proliferation of "off board" contracts (which is massive yet unknown in detail) and you get a sense of the intricately woven financial fabric we often speak of.
  
  
• If you missed The Soprano's series finale last night, don't despair.  It was choppy, sloppy and otherwise inconclusive.  It was perhaps the most anticlimactic hour in television history given the hype and hoopla.
  
  
• "These increases in rates over the past few days have placed the 30-year mortgage market at close to 7% in conventional terms.  This will decimate the housing market if it wasn't already decimated before, and certainly put the Fed on hold, and maybe allow the Fed to reduce rates…six to nine months from now." – Bill Gross, chief investment officer for PIMCO and manager of the world's largest bond fund.
  
  
• This will be a big week for the financials as we hear from Lehman (Tuesday) and Goldman (Thursday).   We've long viewed this group as the most important segment of the market.  Not just because it represents roughly 21% of the S&P, but because it encapsulates the world we live in.  It'll be a convoluted quarter, paced by record setting M&A and weighed against the specter of higher rates.  The tie-breaker might be proprietary trading ops, which are rumored to be weak.
  
  
• And finally, for Minyans who were away last week, we proudly announced the addition of Professor Jon Markman to the MV roster.  He's a sharp cookie and with a fresh vibe, as evidenced by his contributions to date.  Indeed, while most folks were shaking the sand from their shorts this morning, Jon weighed in with this tasty tidbit on the Buzz.  Thank you Jon, and welcome to our 'hood:
  
  Quick follow-up to my item on Friday noting that the Thursday plunge    constituted a 90% downside day. I spoke over the weekend to Paul Desmond, who's head of the venerable institutional advisory service Lowry's Reports, and he wanted to emphasize the rarity of this type of market condition, in which 90% of all point movement in New York Stock Exchange securities is down and 90% of volume is down. He said there have only been around 20 of these in the past 75 years, or less than one every four years.
  
  Desmond said that because they mark a shiver of panic, they most commonly occur near market bottoms. When a 90% downside day happens when a market is near all-time highs, he said, it generally represents the approximate end of a short-term correction that's been catalyzed by some surprising piece of news. "Just as quickly as they panic," he said, "people jump back in and start buying."
  
  However when people are nervous enough to panic, it usually takes a while to get their confidence back, so the market remains vulnerable to another sharp setback within the next few weeks. If one occurs, it should be contained around the low of the 90% downside day. You don't necessarily have to wait, though, as that's cutting things a bit fine. Right now you're not at that absolute low, Desmond said, but "you're close enough to justify new purchases."

R.P.