Yesterday’s thoughts were actually unfair. I stated up front that we were going to be positive, as Joe was in South Carolina and away from the office, and then I went on and made some negative points. I brought up Dubai airports with speed-you-through processing. I brought up convergence. I brought up HFT. And I brought up counterfeit toilet paper. [Hey wait… HFT and toilet paper; there is a book chapter in there somewhere… hang on a minute please while I write that down. Ok done. Where were we?]

Today before I get positive, please allow me to add this bit on convergences: Alia Khalil, senior equity trader at Naeem Brokerage, had this to say about Egypt’s EGX 30, which has gained 8% in the last 8 days: “Surely, economic performance is giving investors more confidence in the market, however, you have to keep in mind that EGX30 has been carefully shadowing its peers overseas in terms of performance.” Is there HFT in Egypt? I’m just saying…

And if you have a moment, please check out this Saturday article on Zerohedge: http://www.zerohedge.com/article/its-not-market-its-hft-crop-circle-crime-scene-further-evidence-quote-stuffing-manipulation- Thanks to Floyd for pointing it out to me. It is about quote stuffing: the submission and cancellations of thousands of quotes within seconds, perhaps not accompanied by an intention to trade (illegal?). I won’t summarize, as that Tyler dude just writes way better than I do, but please read it, and then, with all the other amassed cumulative knowledge we now have about how our markets work, join me in removing all funds from the market, and investing in a sports center catering to children. Or maybe even an ice cream shop. Damn. And I was supposed to be positive this week while Joe was out.

OK, now for the positive. Earnings. The comps may be “easy”, but they were harder comps than the prior quarter. This is good news. Material stocks, tech stocks, bank stocks… they are all beating. Add this to a backdrop where so many managers are underperforming and see that we are 8 months into the year and have to press. This is why I have my doubts the market can get spanked. The market is tough. Scrappy. Like my Number One pictured above. He can bench press 36 high frequency servers, and then shred a face-melting lead on his Strat so fast that it would make the Exchanges jealous. Careful y’all. I am grooming him. He is going to work for our regulators, so shape up, ‘cuz ‘ya don’t want him coming at you from the blind side.

Volume yesterday was still light, as all indices rose about 2%, similar to the morning overseas moves. NYSE Composite volume was 4.8 billion shares, and advancers outnumbered decliners 5.5 to 1. Interestingly, individual investors at the end of July had an equity allocation of only 50%; they do not believe the market. This number is very low, and perhaps a contrarian indicator in the near term.

Where we left off 4:00pm EST:

INDU                      10,674.38                                           +208.44

SPX                        1,125.86                                                +24.26

CCMP                    2,295.36                                             +40.66

Futures now at 7:30am EST:

DJA                                                                                        -30

SPA                                                                                        -2.1

NDA                                                                                        -1.00

Key Data out today:

08:30:                                     Personal Income

08:30:                                     Personal Spending

10:00:                                     Factory Orders

10:00:                                     Pending Home Sales

Since the prior close, some key stories:

– BMW beats overseas; trades up 4%.

–               VRSN, PFE, beat after the close yesterday. PG misses.

–               Bernanke cautious on US Recovery.

–               Washington Post to sell Newsweek to Harmon.

–               IBM raises $1.5 billion in debt markets at lowest interest rate ever; IBM dividend yield is substantially higher!

(Hmmm, What does this tell you about how much confidence investors have in the equity market valuations?)

–               Tropical Storm Colin heats up.

–               10yr yield is 2.92%.

–               US Senate fails to pass $26 billion state aid package.

–               Brad Pitt nicknames himself Mister Mom.

Significant Movers This Morning:

OPLK +14.5% (earnings), SNTS +11.9% (earnings), HLF +10% (earnings), VLNC +7.8% (order), RTEC +6.5% (earnings), HOLX +5.5% (earnings), SUPG +4.7% (earnings), FIRE +4.4% (to enter S&P SmallCap 600), KALU +4.4% (earnings), PPS +4.3% (earnings), SVR +3.3% (earnings), ROG +3.1% (earnings), GENZ +2.4% (report it is in friendly talks with SNY; offer reportedly in $67-70 range), VRSN +2.1% (earnings), SYKE -31.2% (earnings), TNS -17.6% (earnings), VITA -14.4% (earnings), RLD -6.7% (earnings), IVAC -5.9% (earnings), TFX -5.8% (convert offering), BGC -5.4% (earnings), EXTR -5.3% (earnings), PFG -4.1% (earnings), KGC -3.9% (to acquire RBI.CN).

Earnings today:

Before Open: ADM, AMT, BHI, CLX, COH, CTSH, DF, DHI, DISCA, DOW, DUK, EMR, ETR, ETZ, FE, GAS, HCP, MA, MMC, MRO, NI, NYX, PFE, PG, PH, PNW, RDC, SII, SRE, TAP, THC, VNO

After Close: APC, AVB, CBS, CHK, ERTS, HRS, MOLX, NV, OKE, PBI, PCLN, UNM, WFMI, XL