Market Commentary By Art Cashin March 19, 2010 $SPY

Cashin’s Comments
AN ENCORE PRESENTATION

On this day in almost any year, you can tell what day it is by looking for the signs. Of course, what signs you look for depend on just where you live particularly if you live on an island. If you live on an island near Capistrano you look for swallows, for this is the day they return. Or, if you are on the island in the park in Hinckley, Ohio you look for Buzzards - - for truly, this is the day that they return each year.

But, if you are on an island named Staten, you look for red carnations and pastry trucks - - for this is the Feast of San Giuseppe (St. Joseph if you went to an Ivy League School). The Feast of the "Patron of the Family" is the perfect excuse to stuff yourself and your friends with gobs of cream or dough and sugar, baked, fried or whatever and masquerading under names like: zeppoles, sfingi and cannolis. It's an Italian wink at the Lenten calendar - and a tasty wink at that!

There were no pastries on the floor yesterday but there was plenty of puzzlement and a few rumors. And On The Eighth Day They Did Not Rest But They Did Rumor – Stocks spent the day before the quarterly expiration by milling about in a slightly disorganized fashion. The Dow managed to close on the upside for the eighth straight day. The S&P and Nasdaq were basically unchanged.

The internals were not helpful to the bulls. Down volume was larger than up volume by almost 2 to 1. Declines outstripped advances.

The market is now overbought with the bulls starting to hang on hopes of an end of quarter markup. The key event of the day was a rumor that seemed to emanate from the Chicago trading pits. It hit the New York desks somewhere between 11:00 and 11:30. I noted it on the UBS Squawkbox and sent the following note to some trading friends: Chicago boys have rumors of a possible discount rate hike today. Rumor seemed to coincide with spike in DXY and pullback in stocks. Interestingly, the rumor seems to have frozen the high freq. traders. Many have shut down for day. We tried to check up on the basis of the rumor. At first we were told it was a call by a sharp guy who had pegged the prior discount hike.

A little further detective digging found an intriguing press release from the Fed. It was a “Government in the Sunshine Meeting Notice”. It was a notice of an expedited meeting held on March 16th. The topic was: “General Discussion of Discount Window Matters”. Most intriguing was the following part of the notice: Effective March 16, 2010, the meeting was closed to public observation by Order of the Board of Governors1 because the matters fall under exemption(s) 9(A)(i) of the Government in the Sunshine Act (5 U.S.C. Section 552b(c)), and it was determined that the public interest did not require opening the meeting.

MORE RESEARCH



Market Commentary By Art Cashin March 19, 2010