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Let The Light Shine In By Charles Payne

"Everything that's beautiful is cracked, that's how light gets in."
Leonard Cohen

There is no doubt the world, or at least the western world, has a crack in its armor and must find a way to fight on and repair damage simultaneously. This has been the debate in Europe with so-called austerity which has largely been higher taxes with mostly symbolic spending cuts. The crack in Europe is more like a gash whereas the crack in America is large enough to let in the best kind of disinfectant - light. But, will we see the light? Will the American public see the fortune of having Europe melt before our very eyes? Will voters understand the beauty of this light and the pain that comes with it?

Right now the stock market is grappling with these same questions.

Yesterday's early morning swoon points to an underlying fear that triggers the most basic reaction - flee. As the day wore on, other reactions kicked in including the reaction of fighting. Stocks climbed off the canvas and the market gained a moral victory by the closing bell... but that crack doesn't get smaller with moral victories. Moreover, that crack could actually get larger if Americans decide job creation is evil and massive food stamp distribution is sincere caring. As more and more democrats jump on the bandwagon of letting taxes go up on everyone while gutting defense spending, we could drown in that beautiful disinfectant.

Despite the cracks, or maybe because of them, the market continues to hinge hope on Bernanke riding to the rescue. He can mend those cracks but the wounds will not go away. Nonetheless, the street waits and hopes, which means they might even want to endure a few more cracks and chinks in the armor. Today the Fed Chairman is discussing early childhood education, a topic missed by many in Washington DC or simply ignored along with eat your veggies and treat others the way you would like to be treated. It's unlikely he'll give any hints at Fed action but there could always be a parable or Wall Street could simply interpret his comments in a way that promises more cheap money.

The stock market as a direct reflection of America isn't the barometer it once was but lately it seems to be crying out in a way the economy is crying out. Both have cracks and both are begging to be unleashed.

Today's Session

The market is under pressure thanks to Spain and lost in the mix are great earnings from Dupont (DD) and AT&T (NYSE:T) along with several others. The most noticeable loser is United Parcel Service (NYSE:UPS) which seems to be as much a company-specific issue as well as problems in Europe and other places. The flash PMI number in China moved closer to expansion after months of contraction. Several components (new orders and new exports), however, are weak enough to still support more than lower rates to spark economic growth there. Also in China Baidu (NASDAQ:BIDU) posted a strong number and that has some of those Internet stocks higher.

It's still mostly a waiting game, with Spain taking on the role of spoiler that Greece was last summer. While this is going on we are busy refining our list of names to own. This morning I feel great because stocks I really like a lot have posted amazing results including WAB, PII and ABG.

Let's not force the issue this morning but pay attention for another try at an intra-day reversal.