US stocks fell hard again as investors/traders turned cautious, just one week after stocks hit an all-time, and just in time for tax day, but as the economy grows weaker and the government feels less pressure to support stocks to collect taxes, the tone has markedly changed. Recent market action illustrates just how sensitive traders have become.

Investors are playing defense and the S&P is falling back to test a key support at 1541 for the second time in 3 days, and while the primary dealers did successfully defend this level again, it is clear that we are beginning to see a more labored market, and a more defensive market as traders/investors suddenly brace themselves for the struggle ahead. The VIX rises 18% to $16.51, still relatively low but clearly beginning to foretell of increased volatility ahead. All 10 groups in the S&P 500 declined as traders once again hit the SELL button, selling everything across the board. Again, the "herd mentality" playing out. On Tuesday they all hit the BUY button and bought all 10 industry groups.

The fact that we have seen increased volumes on both of the down days suggests that investors are not super comfortable with current market dynamics. SEC filings show that some of our biggest investors are "lightening up". John Paulson sold stakes in JPM, Family Dollar, Sara Lee. George Soros selling his bank names including GS, C and JPM, and Mr. Big, Warren, cutting exposure to consumer names like JNJ, PG, Kraft along with INTC, GM and IBM. Does this make some sense? Of course, they are ringing the cash register, and taking some money off the table as they wait for the market to re-price, using this money for new opportunities that will be created down the line.

I am not saying, nor have I been saying that the market is due for a meltdown, in fact I do not believe that at all. I do though continue to think that the "correction" is long overdue, but how do I define correction? Somewhere between 5 - 7%, taking us back to the 1500/1520 range (off the high), this would be considered healthy and necessary for the market to build a firmer base from which to launch again. As many street strategists have been saying, the second half of the year will produce a stronger, healthier economy, which will produce a healthier market in the long term.

This morning the WSJ reminds us: BAC suffers a setback after "poor results" across the board. This comes as net income quadrupled in the quater despite revenue dropping some 8%. Apple takes Another Tumble, under pressure, down 24% ytd, and 43+% off its highs as Cirrus Logic (main supplier) delivers discouraging guidance. Conversely we did see better numbers out of AXP, and EBAY reports double digit growth yet offers very cautious forward guidance. Weak economic data across Europe continues to hammer the Eurozone. France's Hollande is said to 'slow deficit reduction' to avoid sending that country into a tailspin, Fed Officials re-expressing concerns over systemic risk to the financial system, and to top it off, Checks sent by the Federal gov't to borrowers subjected to "foreclosure abuse" FAILED TO CLEAR. Isn't that a kick in the head?

US futures this morning are +4 at 1550.....as we remain locked in the 1540/1565 range.....again it feels like a knee jerk reaction.....as there no real reason today to run right out and buy for fear of missing out......we are smack in the middle of earnings season....next week we will get almost 200 S&P companies reporting....so expect it to remain choppy as investors/analysts/strategists continue to watch how companies are doing and whether or not they can really sustain earnings and revenue growth to validate current multiples..... Both the World Bank and the IMF warning of the risks of further easing ahead of the G20 Meeting this weekend.

On the economic calendar today we have Initial jobless claims - exp of 350k, Cont Claims of 3.07 mil, Philly Fed exp of 3 and Leading Economic Indicators of 0.1%.... Unless Init jobless claims really disappoint, do not expect much reaction. Strategists are already discounting this number as they once again look for the May NFP report to show 200k+ jobs created, and we know that jobs is the most important gauge for the market, because it speaks directly to the health of the economy but also gives an indication of potential FED policy. (No worries - Uncle Benny has once again reminded us that he is not going anywhere just yet).

Earnings today include MS, PEP, MO, VZ, UNH, PPG, all before the opening bell and GOOG, IBM, MSFT, AMD, Chipolte, COF after the closing bell.

The G20 meeting begins in DC today and we can bet that global central bank easing will be #1 on the agenda as policymakers discuss the impact of all of this unprecedented easing around the world and how they expect to withdraw without destabilizing global markets......

Overnight in Asia, markets were generally weaker as the tech wreck raises concerns and fears across the region of a China slowdown and weaker earnings/guidance suggesting sluggish growth. Japan -1.2%, Australia -1.6%, Hong Kong - 0.26% and China +0.17%.

In Europe, markets are a bit higher, but more of a rebound vs any hard data.....

Italy said to have reached a deal on a new President. The FT reports that "Senior parliamentarians in both parties told the Financial Times that an agreement had been made on the candidacy of Franco Marini, an 80-year-old former Speaker of the senate." President Giorgio Napolitano's term ends in mid-May, and a new head of state will have to try to break the deadlock from the inconclusive February elections.

FTSE +0.4%, CAC 40 +0.8%, DAX +0.42%, EUROSTOXX +0.77%, SPAIN +0.9% and ITALY +1.18%.

Stuffed Chicken Thighs in a Rich Tomato Sauce


This dish is intoxicating.....the smell in the kitchen will ignite the senses causing all to count the minutes until dinner is served. For this you need:
Olive Oil, Chopped Onion, Chopped Pancetta, Homemade Fresh Breadcrumbs, Dried Oregano, s&p, Fresh Chopped Parsley, Grated Pecorino Cheese, Boneless, Skinless Chicken Thighs.

For The Sauce:
Olive Oil, Chopped Onion, Chopped Garlic, Dry Red Wine (Chianti Works Well), 1 (26 Ounce) Can Chopped Tomatoes, Dried Oregano, Chopped, Fresh Basil, Red Hot Pepper Flakes (optional), 1 lb Parpadelle Pasta.

Heat a frying pan with olive oil, Add the onions, garlic and pancetta and cook for about 5 minutes, stirring often until the onions are soft and the pancetta is cooked.
Add the breadcrumbs, parsley, oregano, s&p and stir to mix well.
Remove from the heat and stir in the cheese.

Take each chicken thigh, and fill with about 2 tablespoons of the breadcrumb stuffing. Roll the chicken up tightly, and tie securely with kitchen twine, and continue to stuff, roll, and tie the rest of the thighs.
Heat more olive oil and brown the thighs on all sides over medium heat until golden brown, about 10 minutes. Set the chicken thighs aside.
For the sauce, in a large pot heat the oil add in the onions until soft and translucent, about 5 minutes. Add the garlic, and cook 2 to 3 min.

Add the wine and increase heat to a slow boil and cook until it has reduced by half.
Add the tomatoes, parsley, oregano, basil, and pepper flakes.

Bring to a boil, then reduce to a simmer and add the chicken. Cover the pot, and cook on simmer for about an 1 1/2 hrs. Remove the chicken from the sauce, cut off the twine and slice crosswise into pieces and keep warm.
Bring a pot of salted water to a rolling boil and add the Parpadelle. Cook for 8 mins or until aldente. Reserve a mug of water and strain the rest. Toss back into the pot....add in a bit of water to moisten. Let sit for a min.....Now add the sauce, a handful of grated Pecorino Romano Cheese and mix well.
Serve a helping of pasta on the center of the plate and then top with the chicken. Fill you water goblets with Pellegrino and your wine glasses with the Chianti.


Buon Appetito.