Evening Briefing for July 27th

* THEMES FROM MONDAY'S TRADING: Once again we saw a "beach ball" day in which stocks moved lower early only to bounce back up in the afternoon. This is part of a consolidation of the recent significant strength, and it shows that bulls remain on the sidelines using even modest weakness to buy stocks. We saw firmness in oil and gold prices, but the U.S. dollar came off its lows and 10-year rates closed higher (though off early highs). With 1388 stocks making fresh 65-day highs and only 95 registering lows, market strength remains healthy. Upside momentum, however, remains sluggish, reflecting a multi-day trading range that is most apparent in the NASDAQ futures. This range trade is the dominant picture going into Tuesday's market.

* OVERSEAS/OVERNIGHT NUMBERS: No major numbers overnight; 6:50 PM CT - Japan, retail sales.

* EARNINGS: BP, DB, HIT, SII, UHS, VLO

* WORTH READING:

-- End of the recession? and other excellent reads;

-- China to keep expanding credit;

-- Recapping a tough market for the bears;

-- What might be depressing the VIX;

-- Interesting article on China and imperialism;

-- What it means when the number of stocks making new highs lags as price rises.
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