Market Update JIBBER JABBER

•  Market Update – the market opened on a strong note but ran into some trouble at the 1115 level (this was resistance on Mon, Tues, and Wed morning as well recall); there was never a ton of buying behind this morning’s strength as investors are showing some signs of fatigue.  However, the selling pressure was never that heavy either and despite a strong showing from 11-12pmET today, the shorts/sellers couldn’t press the tape meaningfully on the downside.  That said, today’s rally back to the flat line also lacked conviction (some short covering and mild dip buying).  The bulk of investors are trying to run the clock out on Jul and book the ~7% gains (SP, Dow, Nazz, and R2K all up ~7% for Jul).  Stocks have been consolidating for much of the last 4 sessions (the sp500 is nearly perfectly flat WTD), working off the Jul ramp and maneuvering a bunch of tough resistance points (1110, 1115, 1120); also, sentiment no longer is working in bull’s favor to the extent it was in late June (the latest AAII numbers revealed that bullish sentiment rose 780bp to 40%, a 6 week high).  Looking back on the week, the fact the tape was able to trade flattish at all despite some key groups coming for sale (esp. the steels and semis) is a testament to the renewed resiliency evident over the last couple weeks.  In terms of newsflow today, the big story was earnings (in terms of volume of reports, today was prob. the peak of Q2 on a global basis) and things quieted a lot once the morning passed (the were some intra-day headlines, inc. an A Cuomo fraud charge against some life insurers and the Fed’s Bullard issuing some neg. comments about the risk of deflation in the US).  If there has to be one headline that helped turn sentiment today, it was the weaker 7yr auction @ 1pmET today (although we hit the lows of the day a bit after noon).  Also – some key stocks started to pick up steam on the upside and this helped broader sentiment (inc. GS, which rallied ~3%+ on back of pos. Citi comments, and RIMM, which continues to rally ahead of its product launch this coming Tues).  The bullish tone at MSFT’s analyst meeting today helped erase some of the negativity that weighed on tech this morning (due to NVDA, LSI, SYMC).