The Sound Of Silence

That great big sucking sound that was heard last week and is being heard again this week is the sound of the market pricing in the notion that perhaps, just perhaps, there won't be a second-half recovery.

Or if it occurs, it will be more muted than thought at the start of the year.

If the market was truly fixated on an intermeeting cut, the a.m. release of February confidence, which came in at its lowest read since July '96 and substantially below the Street forecast, should have sparked a rally.

It did, for all of an hour.

Which says the market is holding out for the real McCoy in the form of improved earnings visibility, not just the hope of better visibility via more rate cuts.

Of course, at some point this will change to a renewed emphasis on cuts.

But it hasn't yet.

If a stock like Cabot (CCMP | Quote | Chart | News | PowerRating), the leader among the glamours over the past six weeks, breaks down, as it has done over the past week, that should tell you something about the speculative sentiment.

Ditto for the tawdry action of Microsemi (MSCC | Quote | Chart | News | PowerRating).

Otherwise, Calpine (CPN | Quote | Chart | News | PowerRating) sets up.

As does Chicos FAS (CHCS | Quote | Chart | News | PowerRating).

And EFunds (EFDS | Quote | Chart | News | PowerRating).

Meanwhile, the technical health of the retailers and financials will be important going forward.

If these broad segments break down in earnest, there will be no clearer message that all bets are off for the economy being able to sidestep recession, as it has thus far done.

Of course, the successful intermediate trader understands that the market discounts the future into the today.

Which is why bull markets often begin once news of a recession is made official.

Ergo, keep your eyes on what you see, not what you hear.