I never believed in green shoots - they were always brown at best - and now they are turning black and will stay black through 2010. As I write this Larry Kudlow is screaming, telling viewers and suckers to essentially ignore very disappointing retail sales data and invest based on consumer confidence. Well, pal, consumer confidence is still negative - just not as negative as it was - we all know that - but it is headed south again. C'mon, Zucker, do you really want ratings that badly? Remember what you want badly, you get badly.

Where was I? Oh, black shoots. My newsletter, ChangeWave Shorts, is published by Investor Place Media and we have an in house brand - ChangeWave - and in house survey group that has been doing sentiment surveys on everything from consumer purchases to oil exploration budgets for eight years plus. And they survey the same people, enabling them to create and use great baseline data. And they are never wrong - truly - my interpretation of their results may be wrong, but the data is always spot on and typically weeks if not months ahead of other data gatherers.

While Alcoa (AA) reported earnings on Wednesday, no other key names are set to report until next Tuesday. On Tuesday morning, Goldman Sachs (GS) will report, and Intel (INTC) will report after the close that day.

Heading into this earnings season, expectations are very high because last quarter's stellar numbers are the freshest in investors' minds. As shown below, the average US stock that reported went up 1.70% on the first trading day following its report. (For companies that report in the morning, we use that day's change, while we use the next day's change for companies reporting after the close.) The next closest quarter was +0.90% in Q1 '03. The market did extremely well following the strong numbers in Q1 '03, so the bulls like to compare that quarter with last quarter.

Today, we have a similar situation. Politicians, economists and the media are assuring the public that everything is fine. But governments around the world are frantically borrowing trillions of dollars to fund bailout and stimulus plans, the stock markets have lost over 40% of their value, real estate over 50%, and unemployment is approaching 10% in most major countries.

First Solar, Inc. (FSLR) – The designer and manufacturer of solar modules appeared on our ‘most active by options’ volume market scanner after one trader put on a bearish put spread in the August contract. Shares of the firm are currently lower by 2% to stand at $143.25. The put spread involved the purchase of 11,500 puts at the August 125 strike price for an average premium of 4.90 apiece against the sale of 11,500 puts at the lower August 115 strike for 2.70. The net cost of the transaction amounts to 2.20 per contract and yields maximum potential profits of 7.80 if shares decline to $115.00 by expiration next month. The stock would need to slip approximately 14% lower before the trader starts to profit at the breakeven point of $122.80.

4:02 PM, Jul 10, 2009 --

• DJIA down 36.88 (0.45%) to 8,146.29.
• S&P 500 down 3.59 (0.41%) to 879.09.
• Nasdaq up 3.48 (0.20%) to 1,756.03.

GLOBAL SENTIMENT

It seems just yesterday that Ben Bernanke was rehearsing for the role of the Alzheimer's patient antagonist in Joel Schumacher's latest mad scientist-becomes-insane global dictator B-grade movie, before the House Committee on Oversight and Government Reform, after firing back with a catatonic "I don't recall" after catatonic "I don't recall" when asked to remember even one of the events in what historians will likely one day consider among the most critical 24 hours for modern capitalism. Many thought that this spectacle was merely a way for politicians to score populist points in a McCarthyesque witch hunt sequel of the villain de jour play. It seems they were wrong.

A letter submitted yesterday by members of Congress is now demanding an in-depth investigation into whether the "Federal Reserve has overstepped its authority and abused its power under current law (where it already wields considerable regulatory strength and broad authority)" especially now that the President, under the guidance of certain individuals of his financial advisory committee, is hellbent on "concentrating extensive new power in the hands of one regulatory entity with little to no direct accountability to the public."

The 100-day moving average in crude oil remains the line in the sand, in August at $58.82. We feel we’re getting close to an interim bottom but will remain on the sidelines until a bottom is confirmed. Natural gas is basing out for the last 3 days, the trading range has been 15 cents. Buy October $1 call spreads right here and sit on you hands for the next 5-8 weeks. Risk/reward on the trade, expect to pay approx. $2,000 per spread with a max target of $8,000 profit. We may be wrong on the trade, but would anyone question the trade as an investor taking a trade with a 4:1 risk/reward?

The story remains much of the same, the dollar and yen do one thing and the other currencies do the opposite. We have no recommended currency trades at the moment.

By Bryan McCormick

Today I wanted to show how rapidly sector breadth deteriorated after the S&P 500 hit its peak in mid-June. That is illustrated here with an updated SPX chart and some of its nine sectors viewed on a daily, year-to-date basis.

Bubbles - Reflexivity & Contamination

“The Crash of 2008 and What it Means”, by George Soros is painfully difficult to read; the concept of reflexivity is not easy to understand; it is abstract and frankly, not very well written. But it has profound implications; it explains an important theory. Equally, it lets you into the mind of a highly successful speculator.

When times are tough, one thing that tends to raise the spirits is knowing that somebody else has it worse. And as wretched as the U.S. economy seems, it's not as bad as in other regions.

The International Monetary Fund's latest tally of world economic conditions forecasts a 2.6 decline in U.S. economic output for all of 2009, and anemic growth of 0.8 percent in 2010. That's more optimistic than the IMF's prediction from three months ago, but those are still lousy numbers. A weak economy throughout 2010 would mean a bleak employment picture, an agonizingly slow housing recovery, and another year or two likely to feel like a recession, whether it's technically labeled that or not.

Current Futures: Dow -24.00, S&P -2.60, NASDAQ -4.00

Asian markets are currently trading flat, while the S&P futures moved somewhere lower tonight, as investors prepare for the last trading day of the week.

The U.S. Federal Reserve’s commercial paper funding facility (CPFF) may be siphoning off investment from Europe and prolonging the stagnation of the region’s asset-backed commercial paper market, a new report from Standard & Poor’s suggests. However, planned moves by the Bank of England may bring some assistance to the sector.

The U.S. ABCP market continues to be deeper than the European one and we have continued to see more European program sponsors issuing in the U.S. ABCP market,” S&P says in its Report card on Structured Finance.“For example, at the end of April 2009, five European conduits were exclusively tapping the U.S. ABCP market.

Overall, the major currencies moved lower compared to the dollar during the Asian session, retracing some of the gains seen recently. Additional downside momentum probably came from the S&P futures market, were the index lost 3 points and re-tested the low made on Thursday, and from the crude oil market, as the raw material is once again moving lower. Ahead, the economic calendar is loaded with important data from Europe and the U.S., which may help the market sustain strong momentum during the day.

The Euro (Eur/Usd) is trading once again above the 20-day moving average, as the pair retraced almost half of the gains posted in the previous day of trading. On Thursday, the euro advanced as much as 200 pips, but closed the day only 150 pips higher. During the Asian session, the euro lost another 50 pips.

The Pound (Gbp/Usd) advanced at a strong pace in the prior day, on Thursday, but during the late U.S. session, the pound topped and started retracing some of its recent gains. Since then, the pound fell approximately 100 pips, from which half came during tonight’s Asian session

As promised in Alternate Short Strategy: Purchasing Put Protection for Less, I will be continuing my list of alternate ways to hedge your portfolio without shorting the stock. In this post (part 2) I will be covering the stocks from 21 to 35 on the list of 50 (ranked by market cap). To reiterate my previous post: I believe the market is due for a pull back, so it may be a good time to purchase protection on some of your long positions. I decided to write about the 50 largest stocks (by market cap) in the S&P 500 and give a put protection strategy for each of them. To get a detailed spreadsheet of all 500 stocks, which will allow you to rank them based on their market cap minute by minute with the click of a mouse check out my blog post here.

If you're coming across this post you most likely hold or at least have interest in a stock I'll be talking about shortly. In this article I will lay out 15 option ideas, which will help hedge your portfolio against the downside. These ideas all require using the Bear Put Option Spread Strategy.

Overall, the currency market has entered again into a risk-aversion mode, having the major currencies shed every pip gained on Thursday. The market may have been sent lower, as rumors surfaced that IMF is in talks with 10 Eastern European countries, which added a lot of downside pressure to the euro. Going towards the U.S. session, the market is likely to become volatile around the open of the Chicago futures market, but then the momentum will slowly fade away as the Friday close approaches.

The Euro (Eur/Usd) declined 150 pips during the overnight session, shedding every pip it gained in the previous day of trading. For now, the euro is slightly above the 50-day moving average, which provided a strong support area over the last few days of trading.

Current Futures: Dow -24.00, S&P -2.10, NASDAQ -4.75

Overnight markets are trading slightly below the break-even line, mirroring how the S&P futures have behaved so far on Friday.

Demand for US Treasuries on a flight to quality has trumped the deluge of supply.