The market’s trapped between the ill tidings from overseas and fragile stability at home, writes MoneyShow.com senior editor Igor Greenwald.

It’s one thing for the stock market to be wrapping up its worst quarter in three years. It’s a known bipolar basket case, failing at suicide in the spring of 2009, and then getting high on liquidity fumes two years later, while Europe was shooting itself in both feet and the Arab Spring siphoned gas and lunch money from chronically underemployed America.

But copper’s deemed a more reliable indicator by some as the metal with a reputed economics PhD, and the good doctor’s been looking more gravely ill than even stocks of late, panicked by the prospect of a global recession.

The bond market agrees, if that’s how we choose to interpret banks bidding against the Federal Reserve with money they’re not otherwise lending.

The global economy is seriously out of whack, with Europe tearing itself apart in the name of a toxic currency union and a misguided attempt to fix it by imposing austerity on the countries that can least afford it. Austerity is looming over the US recovery, as well. Meanwhile, emerging markets are submerging as the overheated economies start to slow.

But while the market action and the European mess are terrible omens for the future, the US economy keeps plugging along in low gear, refusing to roll over for now.

So while overall durable-goods orders in August slipped 0.1% after a 4.1% spike the prior month, non-defense capital goods excluding aircraft—a proxy for business investment—topped low expectations with a 1.1% rise, suggesting that flush corporations are still buying equipment.

Moreover, they haven’t yet stepped up layoffs in response to the financial turmoil, witness the dip in this week’s jobless claims.

More signs of stability: the S&P/Case-Shiller Index of home prices in 20 US cities posted its fourth straight consecutive monthly gain through July, though it was still down 4.1% year-over-year. While the number of homes in foreclosure keeps rising, new delinquencies are easing up, offering hope that the housing market might reach bottom in a year or two if the economy doesn’t get any worse.

Even the fears that domestic austerity will drag growth down might be exaggerated. State and local revenues rose 6.9% year-over-year in the second quarter according to Census data. Personal income tax collections were up 17.4%, the biggest jump in five years, according to RBC Capital Markets as quoted by Reuters.

And while 57% of municipalities in a National League of Cities survey said they are in worse shape this year than last, that was a notable improvement over the 87% that were headed downhill last year.

As gloomy as consumers and investors feel, the economy is showing plenty of resilience, a hopeful marker for corporate profits.

It might not last, of course. It takes time for a loss of confidence to translate into purchasing and hiring decisions. Europe is very likely in the early stages of a recession, and growth in Asia is likely to slow significantly.

Those trends will hurt US exports, and the dollar’s recent rise will further weigh on the earnings of the multinationals. Meanwhile, health insurance costs still rising at 9% a year will continue to keep most of the jobless unemployed.

Still, for the moment, the economy’s just strong enough to keep all the market bears in check. It hasn’t yet absorbed the pain of the fading demand abroad. This augurs well for the retail and consumer names that are already doing well.

And if the averages get back to the top of their recent range, investors will get one more chance to sell all the broken cyclical stocks.