Midday Update

Just back from a morning meeting, and the market seems to be hanging in there for a much needed bounce. The market had reached deeply oversold levels, so I think this bounce could have further to go.

Its good to see the market shrug off the negative ADP Employment report, which indicated 697,000 jobs were lost in February. That's a big number. Friday is the important payrolls report from the government, and the consensus there too is for -650k jobs. Ugly.

On a positive note, the Treasury finally unveiled some details on the Home Affordable Refinance program, which will be available to 4-5 million homeowners to try to help lower their mortgage payments and keep them in their homes.

In corporate news, Costco (COST) missed estimates, but the stock is slightly higher. Competitor BJ Wholesale (BJ) beat estimates. GE is trading lower again on concerns that the recent dividend cut will not be sufficient to help the company retain its AAA rating. And US Bancorp (USB) slashed its dividend to 3 cents from 42.5 cents.

Asian markets rallied overnight, led by China which is upping its fiscal stimulus measures. The dollar is mixed so far; oil is trading higher, near $45, while gold is flat ($913). The 10-year yield is up to 3.02%. And the VIX is -7% lower to 47.35. The VIX looks like it has left another lower low on the chart, relative to its January highs (and November and October before that).

Trading comment: Today is only day 1 of a market bounce, if it holds. I will be looking to use further strength in the market to add to my recent etf hedges. Yesterday, I took partial profits on our short financial hedge (SKF). Financials continue to lag this market, which is not a great sign. But the strength in energy and materials is a positive.

less long SKF