Nothing brought home the difficulty of this market more than a trade
that occurred Friday in Philip Morris (MO:NYSE). News came over
that was definitively positive about tobacco: An appeals court struck
down the FDA's right to regulate. 

I remember vividly how these stocks cratered when the FDA took
this right and got a district court to agree. They were hammered
without mercy. But now this victory, the third in as many weeks for
big tobacco, was showing us that the tobacco bulls might have
some life. 

I went down to take MO as fast and as aggressively as possible (I
am still long it). There had been a monster seller in the name,
someone who was trying to move millions of shares. I figured I could
catch this seller off-guard before he pulled his order and scoop some
MO up with a 40 handle. 

I figured Wrong! 

This seller not only DID NOT PULL HIS ORDER, he got more
aggressive, actually gunning his sell order right into the positive
news. Millions of millions of shares came in for sale from this guy,
right on top of our buy orders. I couldn't believe it. How could this
seller not let the stock lift? 

Anyway, some rationality emerged later in the day when brokerage
firm after brokerage firm pronounced victory. But the seller never
wavered. Only after he finished did the stock start climbing. 

One of our readers asked me this morning whether I thought
something was very, very wrong out there or was I just bemoaning a
bad tape where little works. I don't know about the former, but the
latter is what's sticking in my craw. I can't believe how badly big
money wants out of this market. Maybe it is Japanese selling,
maybe it is mutual fund selling locking in what is left of the gains. I
don't know. But the selling is overwhelming at times and requires
TOTAL conviction on the part of buyers to stay the course. 

***** 

Random musings: Futures rallied 8 points from when I arrived.
London moves up from negative. It's that same pattern we have seen
that lulls you into thinking all is ready to rock and roll. Be careful out
there....The Japanese really are hopeless. Long Term Credit Bank
should have vanished by now. In our country we would have
shuttered it months ago. Now it is being resurrected so it can be
merged better? Could the Japanese be more clueless about how to
handle things? This was a huge setback to the bulls as the
cornerstone of any real rally has to be Japan becoming more like the
U.S., not less.