Or was that supposed to be "watching"?

Maybe not.

In a pre-CPI piece of news, Winnebago said that profits fell 14% on lower margins and higher costs. Sales, however, were up 5.2%. Inflation? Hmmm.......

Headline CPI was up 0.7%, Core 0.1%. YOY 2.7%. Energy sharply up - 5.4%; food index up 0.3%.

Looking at the data, transportation is increasing at a compound annual rate of 30.6% (!), while the Fed claims food on a compound basis were 4.2%. Medical care was up 3.3%. Education up 5.3% (!).

Empire manufacturing index was up as well.

The downward pressure came from "owners equivalent rent", which excludes utilities. Well of course nobody who owns (or rents) housing uses energy, right? :-)

The equity markets of course read the headline and futures raced higher, pointing to a significantly higher open, and the bond market reacted with buying, pushing down the 10 to 5.198%.

Looks like we're after tagging those all-time highs - be careful trading this, should you be inclined...... short-term traders could be rewarded here significantly, but its dangerous to try to chase this as a "trend"; the underlying fundamentals in the economy still remain, and one number doesn't change any of them!

Psst: Anyone notice the price of OIL lately? What's with this "headed for $70" thing that's going on? Is that good for equity prices? (Outside of the oil companies, of course)

This looks like it may be a deeply disappointing day for The Bulls. There are indications that the Bond Whack may not hold, oil is nudging towards the $70 mark, and the indices are all off their highs with no follow-through.

If I had to take a bet here it would be that we close either modestly higher (but nowhere near the 1% gain on the open) or even a bit red. The attempt to ream the SPX options market appears to have worked - SPX options expire on the open, working of a SOQ (special opening quote). The nastiness that can ensue if you get a royal pop up on the open and then a down market through the day is enough to make grown men cry blood, and it may happen today.

Consumer sentiment for June is out at 83.7, missing by more than three points off estimates! This is a 10 month low.

What's bad about the sentiment numbers? It translates into consumer spending, usually on a near-immediate basis! This is not good for JUNE STORE SALES, which will be reflected in second-quarter earnings. What's worse is that earnings fell by 0.2% in May on an inflation-adjusted basis, the fourth decline (out of five monthly samples!) this year.

The market totally ignored the sentiment number, along with the march higher oil prices - for now.

Note that my prediction was that the S&P would go after 1535 - we're there. Russell is at 848, again, trying to poke at the H&S and blow it up.

Will people start looking at the data later today? I believe there's a darn good chance. If they do, things could get ugly in a couple of hours.

Stay tuned and be nimble.