The revised U.S. GDP numbers are high, but lower than anticipated. The jobless claims are high enough (4-week average) to not worry the Fed about the job market overheating. Next up at 10:00am today is the new home sales data, and that would be a shocker if the numbers rally.

It might pay to re-read the Econoday report that followed the FOMC decision on May 10.

My feeling is that the equity market will fall between now and say a month from now, enough say to help the Fed make a decision to finally take their foot off the pedal. I think that next month's inflation data will be spun so badly that the Fed will be positioned to skip a rate increase until their meeting on August 8 or possibly September 20.

That should clear the way for a summer rally in equities.

The bad news is that by then, traders will be seeing the effects of the fall-out from the housing market. There will be more talk of stagflation, and probably some talk of recession for 2007.

And that is not good for either stocks or bonds. The bond market I do not believe will reverse its downtrend until rates actually start to fall. I don't see that happening for a couple years because the global economy is fairly robust, and the U.S. will have to keep rates high enough to finance continuing deficits. Otherwise, capital will chase the opportunities presented in foreign markets.

So in the big picture, as this economic data is rolled out, I see that the Fed is gaining some traction in holding the USD from crashing, and will not have to raise rates at the next meeting June 29. But I see nothing happening to cause traders to reverse their overall bearishness, and so I think the future will hold a series of lower highs and lower lows. Periodically, the declines will be steep " as traders of Russia, India, Brazil, and metals in particular have seen.

This is really a good time to be researching special situations that have a likelihood of long-term success, say some solid natural resource exploration plays, or interesting developments in alternative energy, and the like. Rather than take the summer off, I'm ready, willing and able to get into such discussions here.

I also very much like what I see in the constant development of the Web. I see it with this blog. With zero promotion in the mass media " no Kudlow or Cramer panels, etc " the web stats continue to rise. I'm sure there are hundreds of bloggers like me who see the same thing.

Its 9:35 am so the markets in NYC and Toronto have just opened. First prices are up, but as you know, it's the big picture that makes you the big money.

Have a good day.