Broad Market Tone:

• Advance/Decline Line: Substantially Lower
  
• Sector Performance: Almost Every Sector Declining
  
• Volume: Light
  
• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• VIX 16.42 +2.95%
  
• ISE Sentiment Index 81.0 -19.80%
  
• Total Put/Call 1.03 +25.61%
  
• NYSE Arms 2.04 +169.86%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 93.01 +2.21%
  
• European Financial Sector CDS Index 130.33 +4.57%
  
• Western Europe Sovereign Debt CDS Index 252.0 +2.58%
  
• Emerging Market CDS Index 209.16 +1.30%
  
• 2-Year Swap Spread 25.0 +1 bp
  
• TED Spread 23.0 unch.
  

Economic Gauges:

• 3-Month T-Bill Yield .02% unch.
  
• Yield Curve 262.0 -5 bps
  
• China Import Iron Ore Spot $171.20/Metric Tonne +.29%
  
• Citi US Economic Surprise Index -91.40 -17.7 points
  
• 10-Year TIPS Spread 2.30% -8 bps
  

Overseas Futures:

• Nikkei Futures: Indicating -141 open in Japan
• DAX Futures: Indicating +29 open in Germany

Portfolio:

• Higher: On gains in my Retail, Biotech, Technology longs and Emerging Markets shorts
  
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and then covered some of them
  
• Market Exposure: 75% Net Long

BOTTOM LINE: Today's overall market action is just mildly bearish as the S&P 500 trades well off session lows despite a very weak US jobs report, being technically overbought, emerging markets inflation fears, rising eurozone debt angst, US debt ceiling worries, increasing food prices and global growth concerns. On the positive side, Ag, Gaming and Biotech shares are flat-to-higher on the day. Growth stock leaders continue to strongly outperform. Oil is falling -2.2% and Lumber is rising +2.9%. On the negative side, Road & Rail, I-Banking, Bank, Networking, Semi, Steel, Oil Tanker, Coal, Hospital and Insurance shares are especially weak, falling more than -1.75%. Cyclicals are underperforming. (XLF) has underperformed throughout the day. The UBS-Bloomberg Ag Spot Index is up +.7%, Gold is up +.82%, copper is falling -1.0% and Rice is up +.4%. Rice futures are up +21.4% in 6 days. The US price for a gallon of gas is +.01/gallon today to $3.59/gallon. It is up .45/gallon in less than 5 months. The Spain sovereign cds is up +3.96% to 313.67 bps, the Ireland sovereign cds is gaining +5.15% to 898.33 bps, the Italy sovereign cds is surging +10.6% to 239.83 bps, the UK sovereign cds is rising +3.5% to 68.5 bps, the Belgium sovereign cds is up +6.4% to 172.67 bps and the Portugal sovereign cds is up +3.18% to 1,015.35 bps. Moreover, the European Investment Grade CDS Index is up +4.76% to 87.46 bps. The Italy sovereign cds is approaching its record high of 275.0 bps. The Portugal and Ireland sovereign cds are hitting new record highs again. European contagion fears continue to intensify, which is a major negative. India's Sensex fell -1.15% last night, finishing at session lows after a failure at its 200-day moving average. Brazil's Bovespa continues to trade very poorly, falling another -.94% today, and is now down -11.1% ytd. Moreover, Italian(-3.47%), French(-1.67%) and Spanish(-2.53%) stocks took a drubbing today and finished at session lows. US stocks remain extremely resilient given the still developing significant headwinds. Many growth stock leaders are either flat or higher on the day. Investor complacency regarding the deteriorating situation in Europe is high. As well, with stocks still technically overbought, key sentiment indicators registering too much bullishness, likely weaker-than-expected guidance during earnings season and US growth unlikely to bounce back in any meaningful way, the risks are to the downside for stocks in the short-term. One of my longs, (SODA), has risen over +40% in less than two weeks. The stock is too extended short-term. However, I still see substantial upside to the shares from current levels over the longer-term. I expect US stocks to trade mixed-to-higher from current levels into the close on short-covering, falling energy prices and growth stock optimism.