Evening Briefing for July 22nd

* MARKET THEMES FROM WEDNESDAY - We continue to accept value at higher prices in stocks, with particular strength among economically sensitive issues. Traders are using dips as reasons to buy, with the strong overall earnings picture contributing to risk appetite. That is also showing up as firm oil and gold prices; a weakening dollar; and firmness in Treasury rates. We have set up a two-day trading range, with continued weakening of strength and momentum to the upside. I will be watching those intermarket themes closely to gauge short-term sentiment and the prospects for sustaining the recent rally. Given the weakening momentum and drying up of volatility, I am not inclined to chase strength unless it is clear that we have expanded participation to the upside. That did not occur on Wednesday.

* OVERSEAS/OVERNIGHT NUMBERS - 3:00 AM CT - Italy, retail sales; 3:30 AM CT - UK retail sales; 4 AM CT - EU trade balances.

* EARNINGS FOR THURSDAY - AMZN, AXP, BIDU, BMY, COF, CIT, CS, FITB, F, MCD, MMM, MSFT, NEM, NOC, OXY, RMBS, UPS

* WORTH READING:

-- Tracking a war against the producers;

-- The future of neuroscience and neuroeconomics;

-- Poll numbers mixed re: health care reform;

-- Excellent article outlining concerns re: a second stimulus;

-- Bearish outcomes when banking stocks lag;

-- Spain's eye-raising housing glut.
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