Flat on the day, but the firm was still down 25,000. This is a very troubling phenomenon, and it does not seem to be improving. This brings the firm to approximately positive 85,000 on the month. We are net short 6.5 million overnight. Earnings season has begun. Alcoa reported a slight beat on earnings and a slight miss on revenues. The stock is down 4.5% in after hours trading. This is the first indication that stocks are priced to earnings perfection. The dollar seems to want to begin to move higher, and commodities are turning down. This represents a potential perfect storm for the market. Initially a 1300 test had looked appropriate for the S&P cash. The last couple of weeks have changed bears into bulls. Everyone has gotten long. The market feels leveraged. There are only so many times that the market can stand on the ledge and be pulled back. 1300 no loner feels like a psychological level to hold. A full-blown 10% correction from the highs seems more likely. It would not be a surprise to see this correction after a historically strong first quarter. The moves that might be seen in particular stocks will begin to concern prime brokers. The notion of another flash crash, while a small probability, has been priced out of the market. How did we get here? Greed and Ego. The investment community wants to believe that the employment numbers will continue to improve. Companies should be wary of hiring, as margins are the key to their valuations. Home sales are not improving. Ask your local broker. The spike we saw in the first quarter was year-end 2010 bonus driven. The Retail spending was year-end 2010 bonus driven.
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