10-Year Treasury Yield Continues To Drift Lower

The market is weak in early trading, opening in similar fashion to how it closed yesterday.

Punk Ziegel cut its ratings on the investment banks, while JP Morgan lowered their earnings estimates for the group. This is causing a decline in the broker/dealer index to the tune of -2.4% right now. I still think Goldman Sachs (GS) will report a strong quarter and rally.

DELL announced a new $10b billion stock buyback, which is a good sign. The Nasdaq 100 is down the least so far, as RIMM, GOOG, and AAPL remain in positive terrritory.

Oil is lower again today, which is weighing on the energy stocks, but should bolster consumer sentiment and aid the overall market, especially the transportation sector.

The 10-year yield is drifting lower again, which is somewhat worrisome. The bond market is sending a signal that economic growth is weakening dramatically, and the Fed better wake up. I think they should move 50 bps. next week.

If this morning's weakness can be reversed into the close, it would be a good sign. The market ran into resistance levels last Friday, so these pullbacks are not that surprising. But we want to see them contained. A 2-day pullback and then another rally could be in the cards.

long AAPL, GOOG, GS, RIMM, QQQQ