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It’s official.  Stocks can actually go down – but not by much.  The biggest news day of the week went out with a whimper as stocks finished nearly unchanged.  The S&P closed marginally lower as some remarkable winning and losing streaks came to an end.   Bank stocks had rallied 10 days in a row before today’s losses.  The Russell 2,000 finished essentially flat, but ended a 9 day winning streak.  High beta names have been particularly strong over the last few weeks as the Russell 2,000 has rallied 17% in just 25 sessions.

As we’ve mentioned before, this is perhaps, the most remarkable leg of the entire March rally.  Unfortunately, it has also turned into one of the greediest as bears are nearly impossible to find now – as current sentiment readings show.   1,200 is all but a forgone conclusion, which is exactly why it may not be the next stop for this train.  Today’s selling on relatively good news was a classic case of a tired market.  As a reader said today, bull markets begin with bad news and end on good news.  Was today’s retail sales report the good news?

Volume was weak on the day and breadth continues to deteriorate at 1.1:1.    As the rally gets overbought and sentiment swings to wildly bullish readings we continue to see underlying signs of weakness that could point to more turbulent times ahead. The VIX was one index that was unable to break its trend.  The index is now down in 19 of the last 23 sessions – the longest such streak of the entire rally.

From Daily Futures:

U.S. Economy
The U.S. Commerce Department said that retail sales were up .3% in February, stronger than expected. Excluding autos, sales were up .8%. The June 2011 eurodollars ended down .01 at 98.375.

The University of Michigan’s consumer sentiment index fell from 73.6 to 72.5 in March, weaker than expected. The June U.S. T-bonds closed up 11/32nds at 116.30/32nds.

Grains and Cotton
May cotton closed up 1.70 cents at 80.47, supported by today’s weaker U.S. dollar.

The U.S. Meat Export Federation said that total beef exports were up 9% in January from a year ago. Total pork exports were down 8% in January from a year ago. June hogs finished up .60 at 80.80.

After the close, the USDA estimated this week’s beef production at 477.4 million pounds, down 3.3% from a year ago. Pork production was estimated at 432.1 million pounds, down 1.7% from a year ago. June cattle closed up .85 at 92.80.

Orange juice
Even though the USDA raised its estimate of Florida’s orange crop from 129 to 131 million boxes on Wednesday, prices are still finding support that this year’s crop will be much less than last year’s 162 million boxes. May orange juice ended up 2.05 cents at $1.5185.

According to the International Energy Agency (IEA), oil demand in China was up 28% in January from a year ago, more than expected. Also, the IEA increased its estimate of world oil demand in 2010 by 70,000 barrels to 86.6 million barrels per day. May crude oil started the day higher, but closed down .89 at $81.54.

April gold closed down $6.50 at $1,101.70 in spite of today’s weaker U.S. dollar.

Statistics Canada said that the unemployment rate improved from 8.3% to 8.2% in February with a net gain of 20,900 jobs, better than expected. The June Canadian dollar closed up .73 at a new contract high of 98.27.

Eurostat said that industrial production in the EU-27 was up 1.8% in January and up 1.5% from a year ago. The June euro closed up .0086 at $1.3757.

Japan’s Trade Ministry said that industrial production was up 2.7% in January, up from an earlier estimate of 2.5%.