Todays market action has been volatile, with a wild see-saw action, as both positve and negative economic data flooded the market. 

The market saw some initial buying interest on a positve report from the commerce dpt that durable good orders unexpectedly showed a substantial increase in the month of February after falling in each of the six previous months. The report showed that durable goods orders jumped 3.4 percent in February after falling by a revised 7.3 percent (from 4.5%) in January. Economists had been expecting durable goods orders to fall by 2.5 percent. Durable good orders is a leading indicator, and it bodes well for the industrial machinary stocks. Some of the stocks that I like in this segment - GE, PRST (though a much grim printing machinary stock), DXPE. 

The markets saw some further upside as a saperate report showed an unexpected increase in new home sales in the month of February. This marked the latest in recent string of positive housing market data. Though the SALES are on the rise, the median price of the homes has not stopped its decline. With high inventory levels and rising unemplyment it is a hard case to make for a housing market stabilization. 

Midday of the session, when DOW was up about 200 points, investors were spooked by the 34 bn 5yr treasury bond auction results. The auction drew a yield of 1.849 percent and a bid-to-cover ratio of 2.02, well below the average of 2.21. (bid-to-cover ratio is an indicator of demand for the treasuries). The failed auction of UK gilt added to the negative sentiment. I am not sure how much to read into the data, as it seems, it is a holiday for Japanese bond markets and Japan is one of the big buyers of US treasuries. 

The new mantra that is driving the markets over this week is the optimism on PPIP. Economists and investors argue on both sides of the arugument whether PPIP will be the savior. Bill Gross of PIMCO endorsed it. Fink of Blackrock,  and the eternal bear Nouriel Roubini expressed an positive opinion. I personally do not think it will work. Zero Hedge has a very interesting table from Goldman Sachs.. It shows Goldman's estimates for how banks are carrying assets like commercial mortgages and consumer loans on their books. The banks, it seems, are carrying those assets at ludicrously optimistic averages of between 89 per cent and 96 per cent of their original purchase price. For the PPIP to be benificial to the banks (which I opine is the main  intention behind the plan), the bids should be north of 90 cents on a dollar, when the market price for the same is speculated to be below 50 cents on a dollar. However, I was wrong many times and so was GoldmanSachs. 

The most repated sentence on CNBS these days -" March 8th bottom is going to hold"!! and that is exactly what they said from Nov through feb.. " Nov 20th bottom is going to hold". As Jon Stewart said - "FUCK YOU"!!! 

Song: "Last kiss" - Pearl Jam

Mood:  "I wish I were right"