A long MLK weekend leads us into a short trading week. Over the long US weekend the S&P guys in Euro-land were busy taking a hard look at the state of the sovereign entities and their ability to pay back their debts. Evidently, the "sure thing" of yesterday ain't such a sure thing anymore as people in the know have essentially come out and said that Greece will default shortly and that France is getting a downgrade for the large amount of toxic garbage on the nation's balance sheet.
Earnings season just got underway last week in the States and the season continues over the next several weeks. People have noted the de-coupling of the US markets with Europe but we will see if a few bad earnings on this side of the pond or a few downgrades on that side of the pond gets everyone re-coupled in the near term.
The slow melt-up since the October 2011 lows on extremely light volume is running out of steam and even in the past 5 years there are only a handful of instances that have such over-bought characteristics.
We are looking for a pull-back off the recent highs of this past week, maybe with a head-fake to the upside thrown in for good measure, but will be looking to play the long side of volatility or the short side of many high beta stocks that are levitating high above their 50 and 200 DMAs as of late.
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| Dow Jones 12,422.06 -48.96 (-0.39%)
S&P 500 1,289.09 -6.41 (-0.49%)
Nasdaq 2,710.67 -14.03 (-0.51%) |
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