Market commentators have become so used to just about every day being an up one for stocks that today was quite confusing. I was watching CNBC this afternoon as about a half dozen of that network's personalities, led by Maria Bartiromo, were frantically trying to figure out why the Dow--as if someone had flipped a switch--had plunged to a 120 point loss (though it got back about 50 of that by the close.) There were more answers than people, with nobody seeming able to finger any "culprit."

In the end, Tyler Mathisen made as much sense as anyone. He merely pointed out that a market that had been rising so consistently was way overdue for a break; and that the whole exercise he (and the rest of us) have been engaging in, looking for a "why," was merely looking for an excuse. Technically, the S&P 500 is as overbought as it's been since mid-2008. Regardless of where you think things are heading, it's to be expected that--at the least--stocks in particular need time to digest their most recent gains.

But I want to look for a few minutes at some of what has happened the first part of this week, as well as today's developments that Yours Truly thinks do matter beyond today:

Greek interest rates: Though the bond market vigilantes gave Uncle Sam a pass this afternoon (more on that in a minute) they've beaten Greek debt bloody the last few days. Now well over 7%, 10-year Hellenic paper is worse off than when the whole euro crisis purportedly started. The markets clearly have no faith in the alleged EU/IMF aid package announced mere days ago; and why should they?

That the markets did not break much more with the resulting new decline in the euro of the last two days in particular--bringing it within a whisker of its 2010 low against the dollar--demonstrates how much liquidity is still the main (net positive) driver for U.S. markets.

The Fed's outlook: Kansas City Fed President Thomas Hoenig was fingered by a few as possibly spooking Wall Street. In a speech earlier today in New Mexico, he forcefully insisted anew that the Fed needed to tighten credit sooner rather than later.

Yet the central bank's majority position remains quite the opposite of that. Though the Fed may any day now raise its discount rate again, it has NO intention of raising the federal funds rate any time soon. Indeed, Chairman Bernanke's speech in Dallas today provided a considerably less optimistic assessment of things than that touted these days by the stock market cheerleaders. And this, in turn, was on top of what we got from the minutes of the last F.O.M.C. meeting, released yesterday. If you can believe it, the Fed seemingly remains more concerned about deflation than inflation.

So, if anything, bulls who have been bidding up stocks, oil, copper and all the rest due to their increasingly bullish views on the economy might finally be ready to temper that enthusiasm--and the admittedly positive influence of a Fed that will remain fairly accommodative -- by realizing the reason why the Fed is afraid to tighten. As I said back in my ANTI-Predictions for 2010 published back on January 1, "In 2009, the Fed's maintaining of its 0 - 0.25% Fed funds rate level was taken as bullish by the market. In 2010, it will drive money back out of risk assets, once investors finally figure out that the Fed's maintaining of its low rate is BAD news for an economy that is NOT healthy after all."

The ongoing credit crunch: Seconding Helicopter Ben's gloomy presentation was the news this afternoon of a renewed decline in consumer credit for February. Added to that was that mortgage applications have also declined sharply (blamed primarily, though, on a plunge in refinancing activity due to the recent spike in mortgage rates.) Add all of that up, and it confirms that consumers are doing more retrenching and paying down of debt than anything else.

You can see a quite graphic picture of this reversal of fortunes from this afternoon's "Chart of the Day" from Business Insider, at the following link: http://www.businessinsider.com/chart-of-the-day-the-consumer-dies-again-2010-4?utm_source=Triggermail&utm_medium=email&utm_campaign=CS_COTD_040710

A boffo 10-year Treasury auction: It's been 16 years since a long-term bond auction saw the demand that today's auction by Uncle Sam of 10-year paper did (measured by a 3.72 bid-to-cover ratio.) Further--though the market was holding its breath for bad news, following the 10-year's brief piercing of the 4% level just a couple days ago--that the debt went out at 3.9% was better than anybody's expectations. (after the auction, market rates for the 10-year bellwether dropped further, to 3.85%.)

Recent days have seen a story line developing that yields have been moving higher due to the bullish outlook for the economy and, thus, portfolio managers' shifting money from bonds (primarily Treasuries) into stocks. Today was an argument against that. That so many couldn't get enough 10-year, dollar-denominated paper yielding 3.9% suggests that at least some retain a jaundiced view of all the green shoots malarkey, and see Treasuries as a safer bet.

It will be interesting to see if this attitude repeats itself in tomorrow's potentially more troublesome issuance of 30-year Treasury bonds, where market rates have in recent days seemed headed up to the 5% area (but closed today at 4.74%.)

CHECK OUT THIS OTHER SOBER ASSESSMENT: One of the more patient, thoughtful and eloquent "macro" views I've seen expressed anywhere came last Friday morning from PIMCO's C.E.O. Mohamed El-Erian. That there had been, as expected, a plus sign in front of the jobs number for April was a cause for universal rejoicing on the CNBC set; the anchors and guests (save for El-Erian) could barely contain their bullishness.

Though he was pretty much at odds with everyone else in this segment, El-Erian explained why one needs to look beyond what he has previously dubbed a "sugar high" for the markets (primarily) and economy (secondarily) due to the government's massive stimulus and bailout endeavors. His explanation of what's at the root of our current troubles--what he described as "balance sheet" issues, different from the causes of past recessions--was excellent.

You can watch a replay at CNBC's web site of that segment from early last Friday morning at the following link: http://www.cnbc.com/id/15840232?video=1458225236&play=1

A Breakout for Gold?: Most commodities have strengthened anew of late due to what I still feel will be soon-dashed hopes for a strong economic expansion. To some extent--most notably with oil--traders are choosing some of these areas as well due to their being "currencies" in their own rights, as at least a few don't trust anyone's official fiat currencies.

All of them will be vulnerable when the realization hits that economies most everywhere are less healthy than is commonly thought. But there might yet be one exception: gold, which today hit yet another new all-time nominal high in euro terms, and is knocking on the door of breaking above a key level in dollar ones.

If tomorrow or soon thereafter we see today's move to $1,150 ratified (I spoke of the significance of this area again a week ago) we'll be making a couple portfolio changes. However, if gold turns tail at this key level (it's off a few bucks in early overseas trading as I write this) we may be waiting a while longer to make those changes. Either way, stay tuned!

Ignoring China: Today's news was of Treasury Secretary Geithner's trip to China to make nice with some of the leaders there in advance of Chinese President Hu Jintao's visit to Washington in a little over a week. Both "sides" in a brewing currency/trade war have been going to some public lengths to try to put smiles on their faces; what is actually done in the end--about such things as China's currency--remains to be seen. As I discussed yet again in the current issue, China remains in the driver's seat; but it might finally be ready to give in a little on the currency issue to buy some near-term peace (and lessen domestic inflationary pressures.)

I have seen only one mention (and that being in a MarketWatch story over the Easter weekend) of an equally important potential development concerning China. Following the recently-completed deal between iron ore exporters, led by Rio Tinto, and many of its customers (but conspicuously not including China), iron ore prices will be nearly doubling. European steel makers (and governments) are near-hysterical. As for China, that country's biggest industry trade group is asking vendors to boycott iron ore sellers Rio, BHP Billiton and Vale for the next two months (about the amount of excess stockpiles of iron ore China currently has.)

I have previously suggested (more than once, and including yet again in the current issue) that one tool China has at its disposal is exactly this. They know better than anyone that much of the current level of prices for many raw materials has come from outsized demand over the last year, much of which (as I also explain in the current newsletter) has been stockpiled. There would be few better ways to take a lot of steam out of metals prices in particular if that country merely stopped buying for a while; something they have done in the past to knock prices down to a level where they'll be willing buyers again.

Lastly, China has also embarked on additional efforts to actually drain some excess cash from its banking system, rather than merely crimp last year's torrid pace of lending. Here again, with so many markets having been bid up almost exclusively on the China demand story, any significant slowing of growth there will have repercussions.

Earnings season to start: The market is already braced for a disappointment when Alcoa kicks off first quarter earnings announcements next week. Despite high aluminum prices, input costs--for energy in particular--are going to put a dent in the bottom line, as will a series of one-off charges covering everything from the costs to the company of Obamacare, to a couple of smelter closings, and forex and regulatory (mostly Europe-related) costs.

Beyond Alcoa, I think at least some folks are beginning to wonder, as Jack Nicholson might ask, if this next quarter is as good as it gets. It will be the last one where year-over-year comparisons are fairly easy. Even the more bullish traders will be scouring the landscape for signs that earnings growth can somehow continue past this quarter, and based on real demand rather than government stimulus or accounting wizardry. If few are found, we may see more earnest selling than we have had in a while.