Stock Market

Technical
Yes, the market is in correction mode and yes, most technicians have spotted it and are reporting
on it. The SPX did break trend support today, but in the manner of this slow motion downturn, not
decisively and with a thud. The SPX is only mildly oversold short term, and not enough damage has been done by a longshot to get me interested on the long side. So, I'll watch and wait as I would like to
see that sharp break first to let me know there has been some real "give up".  $SPX

Fundamental
I have been watching liquidity in the system excluding the direct effects of QE 2, and it is improving.
That is a good sign for the economy and for Fed policy intent, as it suggests that awaited expansion of
the financial system is finally underway. It is far from clear that this development is on investor
radar screens yet. Looking out toward the end of 2011, if the economy remains fully in recovery
mode and business short term credit demand continues to perk along, the case for pushing up the
Fed Funds target rate would become very much stronger.

In another vein, I would also guess that if the market does not buckle over the next week or so
that players may be holding off on tactics to see how the employment situation stacks up. Sometimes
when there is uncertainty in the markets, the employment report serves to clear the air.