They had it in the bag, man. I am pretty sure the market was topping out into a healthy correction at the least. The big question now is, can all the dust get swept under the rug by managers working feverishly to clean up the mess and to trumpet continued economic growth?
Japan actually helps this effort, as it is a perfect excuse for the correction thus far. Short the Yen, get Libya to magically cease military action and put Ed Yardini out there with this pablum:
“The global economy should pass these stress tests and see continued prosperity”
Nothing is decided until the hopeful rebound takes out some important moving averages. Don't get sucked in by the touts. Japan needs to clear, pumping G-7 monetary managers need to clear, and markets need to settle in so we can get a read on the nature of what would have been corrections of some sort, pre-Japan.
When policy makers and their market guru mouthpieces are on the tout, they are trying to influence you; trying to make you choose one side over the other. It is probably a good idea to let the market decide, in its technicals. The technicals have not yet given the 'all clear'. Not in stocks, and not in Treasury Bonds for that matter.
Bears might recall the line from Blackhawk Down: "A hiss means it's close… a snap means they're shooting at us" (I think that was it). The snap is the moving average cluster on the SPX for example. If broken, it's "okay, now they're shooting at us!"
Until such time, SPX has a more solid support down lower at around 1220.
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