Libya Backs Down After UN Decision

The market is nicely higher in early trading, following yesterday's solid gains. But today is both Friday and also options expiration day, so anything could happen by the close today.

Oil was higher after the UN decision to implement a no-fly zone over Libya, but Libya has since backed down and issued an immediate ceasefire. This has calmed oil prices, which are back near $101.

Most other commodities are higher, including gold which traded back to $1420. Overnight, the G7 countries intervened to stall the Yen's ascent vs. the greenback, so the Yen is lower today, but the dollar is slightly weak as well.

In Japan, the above news items have overshadowed the nuclear situation for the moment. Japan's stock market rallied another 2.7% overnight. But other Asian markets were lower after China raised its reserve requirement ratio another 50 basis points.

In corporate news, Nike (NKE) is getting hit after an earnings miss, which is weighing on the retail index. Cisco (CSCO) is higher after announcing its first ever dividend. About time, since the company is sitting on $40 billion of cash. Financials are leading the market after banks started to announce higher dividends and stock repurchases.

The 10-year yield is higher to 3.27%; and the VIX is down another 10% near 23.80.

Trading comment: Networking stocks are materially underperforming the last 2 days, which could be a bit of a warning sign considering they have been market leaders. Despite the bounce the last 2 days, the SPX is still trading below its overhead 50-day average. So my best guess is that this is the oversold bounce I was looking for earlier in the week. But we are likely to get another pullback in the market in the next couple weeks, and that should present a better buying opportunity than today. Be patient.