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Pisani: Surprise! Big Selloff Doesn't Materialize

Surprise! The big selloff never materialized. Futures were weak at the open on two events: 1) many traders were short the market on expectations that healthcare reform passage would rattle stocks, and 2) more uncertainty over the EU's commitment to Greece.

Two things happened: 1) stocks opened weak, then rallied immediately, causing short covering, and 2) several EU officials — including Eurogroup chairman Jean-Claude Juncker and ECB president Jean-Claude Trichet — made comments supportive of Greece, which reversed the euro weakness/dollar strength. That helped commodities and commodity stocks come off their lows.

Trichet and the Greek PM are playing tag-team here; Trichet said that speculation about an exit from the Euro zone was "absurd" and the Greek PM said exit scenarios were "ridiculous."

Even energy stocks have recovered from their weakness. Schlumberger chief executive, speaking at a conference, saying pricing was weak and it was not clear they were going to make earnings consensus this year, put a scare into energy stocks right at the open.

It highlights a flaw in the rally: energy stocks have moved aggressively and are NOT pricing in an earnings miss.

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Other Commodity/Energy Bigs:

Transocean

Alcoa

Rio Tinto

Halliburton

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CNBC Data Pages:

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