Liquidity Continues Flowing Upstream

So far, that analysis seems correct. But bonds could have another rocky day Wednesday with the next read on foreign buying of U.S. assets, the so-called TIC data, as well as the producer price index, industrial production/capacity utilization data and speeches from Fed presidents Janet Yellen and William Poole.

Barring any macro shocks, the stock market is likely to take its cues Wednesday from the next round of earnings data.

Shares of Intel(INTC Quote) climbed 0.5% ahead of its earnings report after the close, but were down 2.6% in recent after-hours trading. The chipmaker's fourth-quarter earnings and sales beat estimates, but Intel shares were up more than 9% year to date heading into the results, and the bar was thus set very high.

Shares of other semiconductor companies were weak on the day as well, with Advanced Micro Devices(AMD Quote) and Micron Technologies(MU Quote) falling 0.8% and 2.2%, respectively.

Shares of mining company Freeport-McMoRan(FCX Quote) slid 2.9% on its disappointing earnings while Commerce Bancorp (CBH Quote) lost 8.5% after reporting both disappointing quarterly results and a regulatory investigation.

As chief benefactor from a falling oil price, the Dow Jones Transportation Average climbed 2.1% Tuesday, which puts the index up 5.4% from its low point this year on Jan. 5. The transports, which have been a non-confirming, bearish divergence and thorn in the side of followers of Dow Theory, are now 2.7% below their all-time high of May 2006.