Pretty wild market today.

Here's an example



This is Countrywide, which reported awful earnings. And really had nothing to say on their conference call that put any sort of better prediction on the future either - I listened to the whole thing.

Who's buying this crap? You have a company that puts out guidance that has lots of hope and no facts, contains lots of "if nothing gets worse in this or that" as conditions on their forecasts (when you have virtually everyone that's reporting actual facts showing that it is getting worse), they say out loud on their conference call that they have a rating agency issue they're "working to resolve" (e.g. "we'd love to issue more debt to buy more shares back, but Moody's is kinda having a ****fit about that given our leverage") and what happens?

The stock rallies hard.

Nor was it limited to lenders. Homebuilders have come out with horrifyingly bad earnings. Today? They were all up - across the board. Check this chart out



Now look. I'm all for great bull market runs, and in fact was exclusively long (and fully invested!) until roughly mid-February, but can we have it on the back of companies that actually have good earnings? Certainly HOV has nothing to be proud of in terms of their business execution and outlook this last quarter - except for a 6.4% stock price gain today.

Aftermarket Mister Softee beat and Broadcom missed - and they actually did the expected things. So far. We shall see what Broadcom does tomorrow!

From a broad-based perspective things were less convincing. The S&P was 3:5 on the A/D line and in fact the S&P was down by 1. The DOW was 13:17 despite setting a new record, albiet only by 15 pips, all of that attributable to MMM (which did have a good quarter.)

We've still got the same pattern in the S&P and the Dow. We are likely to retain that pattern. That pattern is not foolproof, but its pretty reliable.

Our wedges are still intact.

Oh, and I've been emailed by a couple of people who have picked up my "tell"; I'm not going to talk about it just yet, but let's just say that there is a canary in the coal mine and he's teetering around. He hasn't fallen over - yet - and if history is a guide, once he does, you'll have two trading days - at least - before bad things happen.

So my thesis remains as it has been - we're trading disconnected from the realities in the earnings reports and economic outlook right now, driven entirely by liquidity. This party can and will go on until something disrupts the money flow. I expected a follow-through today if for no other reason than the headlines in every newspaper in the land today, and we got it.

If you want to trade that, have at it. SPY or QQQQ or even DIA are as good as any other choice there. Don't try to pick on individual issues - you're going to get yourself into real trouble there because news has an ugly habit of driving the stock price the opposite of the direction that makes sense! In this environment if you've got a thesis on an individual stock then either short (or buy) it and have the balls to hold through good and bad, or go out six or more months in the options market.

Failing that, ride the indices - but be wary, because if the thesis is correct, sometime in the near-term - anywhere from a week or so to a couple of months from now - we're in for a surprise of the ugly kind.

And - watch the credit markets.