Another day, another Euro.  Or dollar as it may.  Trading lately has been anything but conventional as piece meal news from across the pond results in panic buying or selling.  Today is no exception as stocks opened steady on anticipated Euro zone resolution but has quickly faded (Dow down 140 points on a weakening Euro currency).  Matter of fact, the Euro is in the driver seat for every market.  It goes like this; as the Euro weakens, the dollar strengthens, stocks go lower, oil goes lower, gold goes higher, and 10 year note/mortgage backed security pricing gets better.  Flip side is Euro strengthens and then you know the rest of the story.

The only sore spot here is that credit spreads are once again blowing out.  Case in point is today’s 10 year note/mortgage back trade.  10 year is up 14/32’s (yield 3.34%), MBS up 1 stinkn’ 32nd.  Keep a close eye on this as you know what happens when the market decides to reverse.  10 year will be down 16/32’s and MBS off 12/32’s.  It’s Murphy’s law.

Earlier today, CPI, inflation at the consumer level was down .1% and unchanged ex-food and energy.  No fear here.  This afternoon (1:00 cost) we will see the minutes of the last FOMC meeting.  Could be a market mover.  Technically, most oscillators (slow stochs, ADX, and RSI) are in harmony, telling us that the bull is back.  Just keep in mind that we have come a long way in a short period of time so some time of correction is due.