U.S. markets were closed Monday, but global action in some of the E-Mini futures contracts suggests that a significant number of traders may have spent the holiday weekend sniffing glue. How else to explain the 17-point rally that seized the E-Mini S&P (see chart below) in off-hours trading Sunday night and early Monday morning? That's equivalent to about 130 Dow points, and Tuesday's opening could pump even more hot air into the buying binge if the short-squeeze driving electronic markets takes hold of the NYSE and Nasdaq. This egregious disconnect from reality is bound to seem even crazier to anyone who caught up on Wall Street Journals over the weekend. I spent the holiday skiing in Vail with a friend from New Jersey and his daughter, but I also imbibed the contents of a pile of newspapers that had accumulated to a disconcerting height, as newspapers often do. Two stories in particular left me feeling less than ebullient about the stock market. One concerned what Ahead of the Tape columnist Scott Patterson referred to as the housing sector's 'negative equity problem.' Patterson's belated epiphany is a good six months behind unmistakable manifestations of the problem itself, but his analysis at least puts the Journal on record as understanding the crux of the problem: 'Amid the hand-wringing about complicated credit turmoil lately,' he wrote, 'the economy's fate still hangs largely on something simple and understandable: the value of your home' Alas, No Panic Just so. But how long will it take now for the Journal's editors to glimpse the speeding locomotive at the end of the tunnel? Will it be another six months before they acknowledge on the op-ed page that the mere easing of administered interest rates has not transformed the most dismal housing market since the Great Depression into the widely hoped-for buying
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