The T Report: Again, Still, More of the Same

We are seeing yet another risk rally on stories that this is the weekend Spain asks for a bailout.  Let’s for a minute ignore that we had the same rally on the same stories last Thursday. Let’s ignore the growing effort in Germany to challenge OMT (unlikely to be successful but still not a positive step).

Let’s instead focus on what happens if they ask and if the terms aren’t to strict and if the programs are implemented immediately? My sense is the actual effect will be similar to the effect of one hand clapping.  I would like to be proven wrong, but at these prices and the history of this Spanish government, I don’t see any real near term boost in the real world, so the markets won’t sustain the rally.

ISM was far more interesting.  It seems like an outlier and again the markets couldn’t sustain the gains but if we get more economic data indicating strength stocks could go higher, at least until earnings and earnings outlooks start fast and furious next week.

I remain bearish and seems like another day of fade the opening hopefulness and wait for a more stark reality to set in.