Follow the bouncing ball or stocks. The sellers had control of the market for the last 45 minutes on Wednesday and the first 45 minutes of Thursday. The buyers stepped in and we remain in the trading range of late. Scanning through the sectors I see plenty to discuss relative to direction. Some key points were retail coming back from the selling as WalMart states sales are improving.This could be an important point for the sector through year end. Financial stocks, specifically the regional banks bounced 5% after being knocked to the mat for an eight count. Metals were up showing a renewed push to the upside and AMZN had strong earnings after the bell helping retail again. The outlook is still positive for the market as the liquidity comes alive again. This was my question Wednesday night, will liquidity step into the selling seeing it as an opportunity. For now it did, but we have another full week of earnings next week and plenty to ponder along the way.

The dollar showed it can bounce as well moving slightly higher, but weakening through the balance of the day. I would like to see enough strength to at least keep its head above water for now. This remains a concern looking forward more than near term. As the dollar moved down from the early bounce oil prices rallied back to $82, Gold move back near even at $1061 and interest rates came off their high. Evidence that traders are watching the dollar and the impact to specific sectors.

LEI was up 1% yesterday and somewhat lost in all the hubbub. This shows growth continuing to build and put some confidence back in the minds of investors. Jobless claims? Not improving. They remain above the 500k level and continuing claims are still high. The employment issues is one challenge not going away anytime soon. We are not implementing the right kind of stimulus to put people back to work and the shot gun approach to the economy is doing more harm than good. It is the economy -stupid! Maybe Clinton should send Obama and Congress a copy of his campaign speech.

Real estate is clamoring for the renewal of the tax credit. Why? It gives them something to market. This program has been worse than the cash for clunkers. Remember the story of Pavlov's dog - we are training consumers to buy if we give them something. 70-80% of the home being sold would have been sold without the tax credit. Thus, the cost for the additional sales is astronomical on a proportionate basis. Thus, the real reason the real estate industry wants the credit to continue is the buying will dry up short term to adjust for the those who bought earlier than they would have for the tax credit. The point is the stimulus to buy is a slippery slope.

We continue to face an uncertain economic outlook. The primary reason is we have too many programs like the credit for first time home buyers. The long arm of government is in everything and expanding. This is never good for capitalism and the end result is erratic growth if any growth. This isn't going to change anytime soon. We are in need of a good plan and mission to take the economy and this country forward. Giving things away is not a sound plan. We have opportunities all around us if we want to build the economy, but focusing on giving versus building isn't the solution to sustainable growth.

AMZN should give a boost to start the day what happens from their is a product of sentiment. Investors are dealing with confidence again concerning the ability to maintain growth looking forward. That confidence or belief is swinging the market day to day. Set your stops, stay focused on the goal and control what you can, avoid what you can't.

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