Two reports this morning... the Labor Department reports the CPI for June and the Empire State Manufacturing Index.  One is up and the other is down....Want to guess?

The CPI prints 0.2%, on expectations of 0.1% for the month, and 3.6% for the year.  The annual was 1.1% as recently as November, 2010.  So I would guess that the Fed targets have been reached.. you know, the target of creating inflation as per the QE programs.  This in spite of the mandated goal of fighting inflation.

On the other hand, the Empire State print was -7.79 on expectations of 12 and a May print of 11.88.  This means that the economy is contracting, not expanding.  When I worked at Paine Webber in the 70's, these kinds of numbers were considered evidence of Stagflation.......and those of us old enough to remember the 70's and early 80's remember what that felt like. The report can be found here. 

The financial news out of Europe continues to deteriorate.. the Greeks are rioting, the EEU ministers are meeting in emergency, short term CDS continue to set records for Sovereign debt of Greece, Spain, Ireland, the whole world is holding its breathe, waiting for the inevitable Greek default.

As a consequence of the above financial developments, the first call on the Market had the Dow down 90, but after Industrial Production was reported up0.1%, on expectations of 0.2% of course pre-open market recovered and is down on 32 as this is written at 9:15.

It is likely to be a wild ride today.. and I have no idea what position to take, except I like the cash position.

Best to Your Trading!

Bill