TGIF - The Song Remains The Same

The news backdrop is little changed today. Concerns about the sovereign debt issues in Europe have eased just a touch on the comments by new ECB Pres Draghi who urged officials to move to make progress on the bailout plans.

Bond yields in Europe have stopped rising for the moment. Italian yields are at 6.68%, Spain is down a little to 6.43%, and France is also lower near 3.56%. And the euro is also getting another bounce today.

Commodities are mostly higher. The CRB index is up 0.5%; Gold prices are up a bit to $1725; silver and copper prices are also higher; but oil prices have slipped back to $98.50. With the global economy still slowing, it seemed odd that oil could keep up its recent trajectory that took it back above $100.

So far the materials stocks are leading the early action, while tech is lagging for a second day.

The 10-year is hovering right at that psychological 2.00% level; and the VIX which surged above 35 yesterday has pulled back -4% so far back near the 33 level. I have mentioned repeatedly that the VIX remaining stubbornly above the 30 level was indicating volatility would creep back into the market. I think some of the sharp pullbacks we've seen in the last week are prime examples.

Trading comment: It is said in the market that from failed moves come fast moves. I think that applies to yesterday's selloff. After the SPX broke that uptrend line that I have been watching, selling in the market picked up steam and the SPX quickly fell towards its 50-day average. This is a first area to look for support, around the 1205-06 area. Unfortunately, we have more policy decisions that will color the action coming up. The "Super Committee" as its called is supposed to vote on budget cuts and I think very few people if any think that they will actually be proactive in coming up with a proposal that will please the markets. Color me skeptical.