Almost a third of CAT's sales are in mining equipment, so a rebound in China/Brazil is crucial to even a flat outlook (Asia and Latin America are about 40 percent of revenues).
A couple points:
1) there's been a big bounce in coal stocks this morning as Peabody reported much better than expected earnings, gave a fairly bright outlook for 2012 as well.
And Freeport McMoRan also beat. Steel and iron ore stocks are trading up today.
2) CAT has proven to be an outstanding bellwether of the global economy: it telegraphed a slowdown better than any other stock this year. After peaking at an historic high of $116.95 in February, it quickly dropped 30 percent before bottoming at $78.25 on July 12. Since then, it's been mostly between $80 and $90.
Bottom line: the stock looks like it has a strong base at around $80. Rising on cautious outlook very positive.
My guess: the stock is likely under accumulation by early bulls looking to play a 2013 rebound. (Read more: Stocks Struggle for Direction; CAT Rebounds)
—By CNBC's Bob Pisani
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