Last week, I didn’t want to come off sounding like Chicken Little, but there was some serious damage done to a lot of stocks, and it was very broad-based. It spanned all sectors, caps and styles, and it really looked like the market was running out of gas. Then….last Friday came and we had a very significant reversal with accumulating momentum throughout this week from Merger Monday and a tame CPI that is once again fueling speculation on the number of Fed moves in our short term world. That’s all good - BUT I am not that impressed and have not joined the “all clear” camp. I don’t get too excited about moves that are largely based upon economic data releases whether it’s last Friday’s job report or Thursday’s CPI and housing starts. They are points in time that are often confused with trends and usually don’t survive one-month restatements.

On another matter - would somebody please PUMP UP THE VOLUME?! If it wouldn’t be for quadruple-witching-inspired-trading, volume would have been anemic this week despite all the supposed good news. What really concerns me is seeing the composition of the volume which is less due to institutional block trading and more due to retail investor funds. Seems that we have seen this before and it didn’t turn out so well.

On the positive side…”The Sky is Falling” will not be a theme for me this weekend as I do my analysis. I took a peak at some key stocks last night and for the most part, it was characterized by strong stocks getting stronger and weak stocks getting stronger. However, it was more from a reduction in selling pressure rather than a big increase in buying power. It’s this missing buying power that concerns me whether we are heading higher or lower.