Bill Fleckenstein's Contributions

In case anyone missed it, the Chinese raised reserve requirements over the weekend yet again, and that market was pummeled for about 3% on Sunday night, with no bounce last night. The rest of the world was essentially unperturbed by the action in China, however, and today Europe was higher, led by Spain, as once again folks continue to act like the problems with the PIIGS are in the past (color me skeptical).

Overnight markets were a sea of red, though Asia was not as weak as it could have been because Japan and South Korea were closed, and thus unable to react to North Korea's attack on South Korea. China, however, declined over 2%.

Overnight markets were a bit lower, which negatively impacted the Spooz, though it did not take long after New York opened for the initial losses of roughly 0.5% to be nearly eradicated. There was no particular cause for the rally that I could see; macro data in the form of consumer confidence was a smidgen better than expected, but I don't really think that was the culprit.

Unlike yesterday, today there's quite a bit to cover, so let's get to it. Overnight markets were a tad weaker, though the Spooz edged higher. However, once the market opened selling commenced, led by the high-flying tech stocks, and in the first 30 minutes the Nasdaq had dropped over 1%, with the Dow/S&P off about 0.75%.

In Monday's Rap I noted that I saw no proximate cause for that day's rally, but perhaps today's news (last night's, actually) offers us a clue. Some may have had an inkling of what was contained in this morning's Wall Street Journal, where an above-the-fold headline on the front page read, "Fed Mulls Symbolic Shift," followed by the drop head, "Officials to consider putting more money into bond market as recovery wavers."

Weekend newspapers were quite grim and markets that were open on Monday traded lower. There is no shortage of reasons for that angst, but one making the rounds -- i.e., the notion that governments worldwide will enact strict austerity measures -- I find somewhat preposterous.

Overnight markets were mixed with Asia a bit better but Europe weaker. Initially, stocks here tried to rally but soon turned red, led lower by the Nasdaq which a couple of hours into the day had lost 1.5%. The market then flopped back and forth in a wide range around unchanged (though the Nasdaq remained over 0.5% lower) until about 90 minutes to go. The last hour saw the Dow lead a charge higher and by day's end both it and the S&P had gained just over 1% while the Nasdaq remained slightly lower.