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Ring Around the Rosie


That PPI was the best they could do?


Spread out now rosie
Doctor come cut loose her mama's reins
You know playin' blind man's bluff
Is a little baby's game

(Bruce Springsteen)

Good morning and welcome back to sticks that stack. The pipeline is full of earnings galore and they're coming out fast with data hardcore. "You gotta believe it's a letdown so far," said Boo the young bear as he drove in his car, "and while it's been close, it's been no cigar as the leaders (thus far) have not cleared the bar." Can the bovine continue to take this bad news, or are Boo and his crew now set to abuse? We're over the hump with two days left still so take a deep breath as we romp through the 'Ville.

A recurring theme has begun to emerge during this last dance and minxy romance. Bellwethers, the chiefs that lead the trading indians, have been sold into the earnings--only to disappoint after the earnings. The names read as a who's who on the Wall Street honor roll. Merrill (MER:NYSE), Intel (INTC:NYSE), Nokia (NOK:NYSE), General Motors (GM:NYSE)...the list goes on but the point is well taken.

While it has become increasingly difficult to talk about the tape as a homogenous vehicle (so many moving parts), the aggregate earnings will eventually be digested and factored into the current mix. Piece by piece, day by day, tick by tick, an element of doubt has crept into the collective mindset. That fundamental seed that will eventually become the root cause for a psychological sea change when assimilated with the deteriorating technicals and structural impediments.

The fellas from Matador City is entirely more constructive, naturally, as the bullseye view focuses on tha absorption of the recent headlines. And while stock jitters are palpable, the credit markets continue to yawn as the watch their equity brethren chase their tail. The balance, for most, is that valid concerns are warranted but, by and large, traders are conditioned to buy the dip. That stylistic approach self-fulfilled throughout '03 but many of those traders are now under water. What is their pain tolerance and how long will they believe in the "we're fine until the election" trade?

We power up this tricky pup to find a firm Asia (Nikkei bounced on the 50-day), a pink Europe, a slightly bouncing dollar and metals gettin' sold. The PPI wasn't the disaster some were looking for and my first glance off-the-top-of-my-head vibe was "equity friendly, metal bummer." With that said, this is a single data point in a sea of muck so keep your right hand up and trade to win. We've got two days remaining until our requisite respite so lets make 'em count.

Good luck today.

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