Market sentiment is in a terrible place right now. The headline driven tape is hard to fight when it seems like all headlines are negative in nature. It is kind of scary when you hit the highs of the day after a terrible macro economic data point hits the tape! Who says there is no such thing as the Bernanke put? We have been inundated once again, with European headlines which seem to go from bad to worse. We heard this AM that the big rating agency, Moody’s, was close to slashing ratings on several big Spanish lenders. They have come out and slashed several regions ratings but the banks have been spared as of this moment. Do not get too comfortable. The Greek election we have learned in early polling, may lead to a locked market once again! Please excuse the floor humor. One has to wonder if Greek elections will become as numerous as Quantitative easing programs! The question becomes, how do you keep trying to keep them afloat if there is no clear cut decision as to whether they will remain in the Union to begin with? I guess thankfully for us the Italians and Portuguese have taken a day off from headline grabbing or who knows where we would be trading. We have some more heavy lifting to do tomorrow as we close out the week. China will release Property Prices and Flash Business Sentiment. At this point not sure if another reserve ratio cut would even be noticed! Europe will concentrate on German PPI and a scheduled Italian sovereign debt auction. Throw in the Spanish Trade data for good measure. North American traders will be watching Durable Goods and Factory Order revisions here in the US. Canadian CPI is also on tap. Tomorrow is option expiration as well. Volume and volatility will probably be ramped up accordingly. Have a wonderful afternoon.

Yesterday’s High: 1341

Yesterday’s Low: 1324

Yesterday’s Close: 1324

Fibonacci Levels: 1279,1290,1297,1300,1307,1314,1324,1328,1330,1332,1335,1337,1341,1347,1351,1358,1364,1369,1375,1385

S&P:

Resistance: 1341, 1345, 1352

Pivot Point: 1335

Support: 1328, 1324, 1317

DeMark: 1321, 1333, 1337

Euro/USD: 1.2975, 1.2922, 1.2828, 1.2775, 1.2681, 1.2628, 1.2534

Headlines of Interest:

Spanish Debt Auction produces higher yields
French say the fiscal compact will not be passed as is
Euro through $1.27
European bourses lower by 1% on average
US Futures Flat, Treasuries Unchanged & Crude and Gold up small

Calendar:

8:30AM Initial/Continuing Claims 365k

9:55AM Philly Fed Confidence Data est. 10 vs. 8.5

The $TRIN has closed below 1 only once the month of May…May 1st was the only day when monthly cash flows can be blamed…currently 1.26….

Headline chop is back again. Futures stronger this AM pre-open. Macro data here in the US was mostly better. Hooray! Then, the headlines from Europe took over once again. The major indices’ across the pond closed mostly flat, except for the Spaniards which saw the IBEX set nine year lows. Not 100% sure why, since the Italians tried hard to put the spotlight on themselves. The technocratic government said growth is contracting, and their banks are also seeing major out flows. Hmmm. Then like clock work the Greek’s were center stage once again. Mr. Draghi was present at a previously scheduled engagement. Think – tanks and rumor were flying off of the presses calling for further stimuli. Mr. Draghi had none of it. He even stated the ECB was not in control of the Greeks future. Greek voters, tag your it. I wonder if the old Bundesbanker’s got a lock of his hair from somewhere?! I hope he has a personal hair stylist in the future, a la the old John Edwards. The alphabet soup of banking agencies in Europe has questioned whether the Greeks would be better off taking care of business outside of the Euro-Zone. So, in summary, not much has changed. Tomorrow’s calendar looks as follows:

Thursday: Australian Consumer Inflation 3.3% prior Japanese Industrial Production Spanish Sovereign Debt Auction US Philly FED 12 versus 8.5 prior US Leading Indicators 0.1% versus 0.3% prior

Earnings of Note: DANG,PLCE,ROST,LTD,GFI,BONT,PCP,CSC,GME,ARO,AMAT,INTU,GPS,BRCD & YOKU

Analyst Events: DECK @ Lazard, PCAR @ WFC & ZION @ JPM

Conferences: BofA Transports Conference

Have a wonderful afternoon!

Another headline driven day for the markets. Futures were higher preopening as German GDP, and the lack of negative Greek headlines had market participants thinking we were in store for at least a dead cat bounce. These hopes were quickly dashed as the Greeks came out close to the opening bell and stated a coalition government was out of the question and new elections would have to be held in earnest. Since this time equities have been driven by the whim of multiple headlines. Will the Greeks honor previous agreements? The fact that Spanish Yields are blowing out again is making credit conditions in country worse by the moment. Ratings agencies are becoming more active as the economic data gets worse, and the funding becomes more difficult. See Italy last night. Europe closed down between ¾ of 1% and 1 ¾%, with the periphery taking one on the chin again. The analogy has been used over and over again, but this looks like watching a slow moving train wreck. At least we will have the G-8 and EU Ministers meetings to try and right the global economy! Please note the sarcasm. The Italians are probing around last September’s lows before the technocratic government took over. I am sure all the Ministers will be finger pointing to the guy on the right for the current market swan dive. I think Merrill Lynch put it pretty well this AM, and I am paraphrasing, investors are waiting for an event that will cause a ‘policy panic’. Since the market has never been weaned off of mother’s milk since 2009, this seems to be the direction we are heading. Hopefully the ‘event’ is not too destructive before the panic actually sets in! Tomorrow’s action is as follows:

Australian Consumer Confidence -1.6% prior Italian GDP YoY -0.4% prior UK Unemployment Data Euro Zone CPI Core YoY 1.6% prior Swiss Zew Survey 2.1 prior Bank of England Inflation Report US Housing Starts/Building Permits estimates 678k/735k respectively US Industrial Production 0.5% versus 0.0% FOMC will release prior meeting minutes Earnings of Note: ANF,CHS,INN,SPLS,DE,TGT,VVTV,EXP,HOTT & CTRP

Analyst Events: AGCO @ JEFF, CVS @ Cleveland Research, RAX @ RBC & V @ RBC

Japanese GDP overnight

Have a wonderful day!

Fibs: 1337,1338,1339,1341,1344,1345,1346,1347,1349,1350,1356,1362,1366,1373

DeMark: 1329,1338,1345

S&P:

Resistance: 1364,1358,1348

Pivot: 1342

Support: 1332,1326,1316

German GDP better…Zew Confidence worse…US TIC Flows & Business Inventories on tap

S&P Futures up 7 handles…10 Year is up small…could be a tell

New Lows trumped New Highs yesterday 2 to 1

The percentage of stocks above their 50 day moving average has fallen to 29%

The percentage above their 200 day is 67%….

Another week looks to be starting on shaky ground. The Euro has cracked the $1.29 level to begin the trading week and the reasons are plentiful. The Greeks have failed to form a coalition government over the weekend, and have said they will try once again tomorrow. Chancellor Merkel’s political party has taken one on the chin in regional elections. The French have stated they will miss budgetary goals as the change in regime is finding many unpaid chits under desktop calendars. Spaniards taking to the streets en masse also has many thinking the European Spring may turn into a long hot summer. Even the central planners in China could not boost the risk on mood by cutting banks reserve requirements. Is this hard landing on its way? The BRICs are slowing. The Europeans are imploding, and we sit here in the middle of our own political dog and pony show with elections just around the bend. Who can lead the globe out of this economic and political morass? Like a game of musical chairs who will be left standing when the music is over? As we learned in the not too distant past, quantifying the fallout of a crisis is hard to do. Leadership and restoration of confidence do not come easy. Be careful out there as this week is packed with potential market moving events. Have a wonderful week ahead.

Sunday:
China New Loans $780B estimate
New Zealand Housing & Retail Sales

Monday:
China Actual FDI 2.8 vs. -6.1 prior
Australia Home Loans
Italian Government Debt figures
Euro Zone Industrial Production -1.8% prior
Italian & Spanish Sovereign Debt Auctions on tap
European FinMins meet
Earnings of Note: IOC,IAG,SLW,SDRL,A,ASEI,GRPN & RENN
Shareholder Meetings: PBI & DX
Analyst Events: BMC @ RBC, IPG @ JPM, MAR @ WFC & WYN @ RBC

Tuesday:
Royal Bank of Australia will release its meeting minutes
Japanese Consumer Confidence 40.3
French, German & EuroZone GDP data
Merkel/Hollande Face to Face Meeting
German ZEW Survey – Economic Sentiment 23.4 prior
Greek Sovereign Debt Auction
US CPI 0.2% ex Food & Energy
US Advanced Retail Sales 0.2% versus 0.8%
TIC Flows
Business Inventories 0.5% versus 0.6% prior
Earnings of Note: VIP,HD,SKS,PBR,TJX,VAL,DKS,TUMI,JCP & THQI
Shareholder Meetings: MS,JPM,S,TWX & ESS
Conferences: BofA Global Metals,Mining and Steel + Healthcare, JPM Homebuilding & Global Media & Telecom
Japanese Machine Orders

Wednesday:
Australian Consumer Confidence -1.6% prior
Italian GDP YoY -0.4% prior
UK Unemployment Data
Euro Zone CPI Core YoY 1.6% prior
Swiss Zew Survey 2.1 prior
Bank of England Inflation Report
US Housing Starts/Building Permits estimates 678k/735k respectively
US Industrial Production 0.5% versus 0.0%
FOMC will release prior meeting minutes
Earnings of Note: ANF,CHS,INN,SPLS,DE,TGT,VVTV,EXP,HOTT & CTRP
Analyst Events: AGCO @ JEFF, CVS @ Cleveland Research, RAX @ RBC & V @ RBC
Japanese GDP overnight

Thursday:
Australian Consumer Inflation 3.3% prior
Japanese Industrial Production
Spanish Sovereign Debt Auction
US Philly FED 12 versus 8.5 prior
US Leading Indicators 0.1% versus 0.3% prior
Earnings of Note: DANG,PLCE,ROST,LTD,GFI,BONT,PCP,CSC,GME,ARO,AMAT,INTU,GPS,BRCD & YOKU
Analyst Events: DECK @ Lazard, PCAR @ WFC & ZION @ JPM
Conferences: BofA Transports Conference

Friday:
Chinese Property Prices
German PPI YoY 3.3% prior
Canadian CPI MoM 0.3% prior
Earnings of Note: ANN,BWS,FL,HIBB & PBR
Shareholder Meetings: ICE,ROC,AON,CVC,RIG,SKT,PXP,JCP,M,WCN & ZBRA