Yesterday's oversold bounce was just that and now we're getting oversold again. The dollar's sharp rally Wednesday took most commodities, except precious metals, to the woodshed. So why would the dollar rally with a trifecta of lousy economic data? It's more likely repatriation and a flight to safety as risk avoidance remains job one.

And, the data was horrible led by the Empire State Manufacturing data (-7.8 vs 14 expected), Industrial Production (.1% vs .2% expected) and the Housing Index (13 vs 16 previous) which combined to hit stocks hard. Yesterday's theme, "not as bad as feared" was quickly forgotten for the spin it was.

Sure, folks are worried about Greece but it's a small country. Nevertheless, it's symbolic of the debt crisis contagion moving around the developed world from PIIGS to as far as Madison, Wisconsin. Political leaders must confront realities born of this growing cancer. It won't by pretty, it won't be fun but it must be done. Where's the leadership?!

What's next?

If you care, there's Jobless Claims Thursday (Care to guess? Most experts are just picking numbers out of the air now); Housing Starts and the Philly Fed Survey.

Volume Thursday was again much higher on selling than the previous rally. Breadth was quite negative and approaches another 10/90 day.

     

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