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Right on cue, the economic numbers came in slightly better...


Good morning and welcome back to the dull edge. Monsieur Hoofy was groovin' right along yesterday when--out of nowhere--Boo skated by and grabbed the bull by the horns. The upside express was briefly undressed as traders shedded exposure but, at the end of the session, it was another victory for the bodacious bovine. Can the upside crew continue to turn the screw or will Elmer's zoo introduce our friend Boo? It's a new day of earnings fray so roll up those sleeves and let's get on with the show.

We've discussed the dynamic currently in play with regard to our metrics. We know that the structural metric has been the key driver of this rally but, at a point, earnings will have to validate. As we enter the meat of the reporting lineup, there are a few things we need to keep an eye on. For instance, how much of the recent improvement is a function of cost cutting vs. a tangible pickup in end demand? Tech executives haven't seen it--but to be fair, they didn't see the cliff either until their Wiley Coyote impression kicked in.

The chatter buzzing around the trading wires late yesterday was that a large (E-mini) futures error caught the crowd going the wrong way (how do they know where we're going?). While there's debate this morning as to whether that occurred, the velocity of the drop was a reminder that markets can move in both directions. The S&P spent the better part of the day huffing and puffing and trying to blow through resistance. When they failed to "take out" S&P 1015, the three little piggies all went home.

The always animated Elmer will paint the tape this morning (10am) and traders will be paying close attention to the Fed chief. That, coupled with the reaction/posturing to today's earnings, will set the tone for the magnificent Minx. There's a historical downside bias when Elmer hikes the hill but, as we know, a multitude of metrics are meeting in the middle. Stay tight, stay sharp and remember that there will be a fair amount of "what if" posturing ahead of Intel (INTC:NASD) tonight.

Objectively speaking, the technical picture remains constructive. While that's the main beef with chart work (better higher, worse lower), we must acknowledge that the series of higher lows is very much in tact. Further, the BKX broke out (above 900) and the S&P will offer the same signal at 1020 (if and when). In CHiP land, SOX 400 has been a level of contention and you can be sure that Ponch and John will try to find footing there.

In Minyanville news, the amazing event we've been alluding to will be announced towards the end of the week or, at the latest, Monday. Either way, the wheels are in motion and we're looking forward to finally spilling the beans. We do many things in our lives but giving back is by far the most rewarding. Along those lines, there's a whole heckuva lotta rewards coming soon to the city of critters.

Good luck today.
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