Down...but it was a controlled descent

Driven by losses in overseas markets stocks opened in the negative right away. There was an attempt to press the downside and there was an attempt to push prices up. However, neither the one nor the other gathered any momentum and once we passed 11.30 ET we just traded sideways. At the end of the day it was a small range day...with low volume and not much to report.

The Dow closed solidly in the minus, loosing 154.92 points or - 1.82 %.

News on the economic front was limited. About the only number released today was the wholesale inventory report for March 2009. The number came in at a total inventory value of about 411.7 Billion US-$, down -1.6 % from the prior number.

Today's inventory number marks the lowest inventory number since November 2007. The shrinkage in inventory is in line with the contraction in overall economic activity...so...no surprise here as far as I am concerned.

President Obama gave us a glimpse at the long awaited health care reform. The annual cost is estimated to be about 200 Billion US-$ and of course, it is anybodies guess how it will be financed.

The Budget office gave us an update on the expected tax shortfall versus prior estimates for 2009. Tax revenue is now forecasted to be down a little bit less than 100 Bio US-$ versus prior numbers. As such the 2009 budget deficit is now believed to be 1.8 Trillion US-$.

Our 2009 budget deficit now equals about 12 % of total US GDP...by all accounts a staggering number. Makes me wonder why we don't just add another 200 Billion to it and get health care reform financed...

As I have been saying for more than a week now...I am neutral stocks and expect a pullback. It is to early to tell whether today's decline marks the beginning of a more sustained decline since the decline was low on volume and without much downside volatility.

Tomorrow might be an interesting day. Further substantial deterioration in prices would indicate that a more prolonged correction is beginning.

Aggressive investors should hold onto their puts.

Until tomorrow,

Steve Benger