NEVER MIND

Wednesday's rally on FedEx earnings, FedEx being a bellwether, was quickly reversed on Thursday's, weaker leading indicators. I think by now everyone agrees the economy is going to slow, and the market is fighting about how much, how soon. Today, the takeover of Kerr-McGee, helping energy stocks of course, was offset by earnings warning of City National Bank blaming the yield curve. So the market overall is kind of sideways.

Next week doesn't look that great either, with new and existing home sales probably showing weakness, potential earnings warnings, the Fed raising rates with the potential for more hawkish rhetoric and the consumer sentiment indexes being a toss up. We will see if month end window dressing can save the day.

UP UP AND AWAY

What I believe the market is telling us today, is that in spite of higher rates and oil and a slowdown in housing, if you stay away from homebuilders and automakers, earnings are good, and projected to stay good. Most companies are doing very well and think they will continue to do so in spite of the gloomy macro economic background. That's the spin today and can continue to be until the next bad economic number or earnings warning.

In my view it's a bear market bounce, but it can carry further. We are up about 1 1/2% today and it could go another 1 1/2-3% . At that point I'd certaintly start putting out some shorts again.

Life is so much easier as a bull. The market went up for four months and gave up all its gains in May. That is typical. Markets fall faster than they rise. In this example, everyone wound up at zero returns, but the bear had one month of bliss and four months of agony while the bull enjoyed the reverse, four months of bliss and one month of agony.