Stock Market

Well, there has been a roundtrip back to the Jan. / Mar. '08 closing
lows. The rally off the Mar. lows was a bit of a rocket, but it lasted
a couple of months and provided solid trades. The news needed to
ratify it as the opening run of a cyclical recovery -- evidence inflation
was set to moderate plus evidence that earnings would soon be
turning the corner -- was not forthcoming. So, the market has fallen
back.

There could have been a panicky downside breakaway move today,
but there wasn't. There could have been a hard driving rally off
important double support, but there wasn't. The SP 500, now near
1280, is deeply oversold on measures out through six weeks and
down enough to perk up trader interest. Guys who are thinking
"nice oversold and a triple bottom, no less" may be prepared to
move right in on Monday, an hour or two after the opening.

For my part, I think I'll wait a week or two. Today's wind up just
above '08's closing lows is too pat for my taste. Moreover, I would
like to see how much punch the bears have left in the short run,
and whether the bulls are more discouraged after a deflating round
trip.

I am also interested in whether this week's "in your face rally " in
the oil pits will go anywhere. They have called the Saudis' bluff and
have given an increasingly agitated US Congress the finger. Given
the damage a new and strong oil price breakout may do economically,
it will be well worth a look to see if producer and consumer leaders
are willing to turn a little nastier, and to what effect.

I have all my deck furniture spruced up and set up. The glass pitchers
are ready for whisky sours and vodka collins's. I have some nice hand
rolled leaf and my lighter at the ready. That's where I'll be this
coming week.