We deem this action representative of a market that has lost the flurry of last week's panic buying and instead is rethinking its view as to the near-term motivation of the Fed and the impact of Katrina.
Without more critical information, people are not going to be willing to push it. I don't think the market has been short enough or bullish enough to push this rally further.
It's not that the market is bullish, it's that it stopped being bearish.
The market was bid before this report, but we do cite the decline and downward revision as more supportive data.
The legacy of this week will be of a market that's cracked even before it gets the weight of supply and anticipated strong January data.