This unrest isn't going to go away it seems. It just keeps escalating country by country. There are some bad actors wishing to take advantage of conditions but that's to be expected. In the end, it should be a positive for this region but the end might be lifetimes away. In the meantime, the U.S. is paying a huge price for not having any coherent and effective energy policy over the last 40 years. This is due to a lack of truth-telling and courageous leadership. Absent this we have outsourced our needs to unstable areas and fought two recent wars to maintain a safe and reliable flow of supplies. This should be unacceptable yet it continues.

Meanwhile back at Wall and Broad markets became unhinged over rumors of Saudi tanks in Bahrain and U.S. ship movements to the Libyan region. Oil prices spiked to $100 again, precious metals rallied while the dollar rallied slightly in a safe haven move. Curiously, bonds were lower most of the day only to close the day higher.

Economic data was focused on the ISM Index which came in higher but near expectations. The headline number was bullish but inside the numbers the "prices paid" component soared meaning higher end prices, a margin squeeze and/or stagflation.

Earnings continue to come in beating expectations overall but we're at the tail end of the season. Earnings to come will center on retailers which should rightly be viewed, given current conditions, as old news.

Bernanke gave his Senate testimony and mostly lied his way through it. I've given up trying to be ambivalent about this since the lying and spin should upset everyone. The "core rate" nonsense is a manipulated smoke and mirrors diversion from the truth. Inflation is rising and we see it in our real daily experience.

Volume increased substantially as has been typical on selling days with SPY volume increasing by 50% from Monday. Breadth per the WSJ was decidedly negative.

Continue to U.S. Sectors, Stocks & Bonds

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