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World stock markets showed some weakness overnight and that weakness might have come from any number of minor bearish themes. First of all, it is possible that the markets were simply banking some profits and were in need of technical balancing. It is also possible that news of a quake in the Asian region, sparked some weakness, or it is possible that fresh restrictions on borrowing in China provided a slight financial tremor. In looking at the developments from Greece overnight, it would seem as if that situation was mostly under control and therefore not the source of the sideways to lower overnight price action. One could also suggest that a very minimal rise in Euro zone GDP and or a decline in UK Halifax house price report were discouraging and possibly a source of minor selling in stocks. Our gut suggests that the initial weakness today, is the result of the Chinese tightening and the need to technically balance stock prices. In looking forward, we are slightly positive as the scheduled numbers today look to be indicative of ongoing growth and since the US Fed Beige Book yesterday afternoon also conceded to growth across most US Federal Reserve districts, the overall macro economic view should remain positive. However, it would seem like the US Administration is once again poised to push for the Volcker rule and that should be considered a limiting development.

S&P 500: Unfortunately for the bull camp, up trend channel support is seen all the way down at 1100.30, with a closer-in support level seen at 1112.80. We see a critical pivot point this morning into the scheduled US data, as the market has already managed a slight technical correction and the failure to bounce off decent US numbers and the initial results from the Greek auction would suggest that the bull camp is losing its desire.

DOW: The March Mini Dow showed some patently bearish technical action overnight as it managed to take out the prior two session’s lows. However, up trend channel support in the March Mini Dow is seen at 10,308 and that up trend channel support line rises to 10,335 on Friday. The market seems to be partially undermined, as a result of the renewed push for the Volcker exclusion and that might mean the US scheduled data will have to be distinctly positive this morning in order to rekindle speculative buying interest in the market, especially ahead of the ultra critical monthly payroll report on Friday morning.

NASDAQ: The March Nasdaq comes into the action this morning waffling around both sides of the 1850 level. Critical support is seen down at 1842.75 today and a failure of that level could promote noted stop loss selling pressure. Apparently some players are fearful of the monthly US payroll report on Friday morning and that should make today’s rather active flow of scheduled data rather important. In fact, unless the Greek debt sours from an initial favorable standing we suspect that liquidation pressure might be limited and easily reversed by US scheduled data flows.

TODAY’S MARKET IDEAS: Some technical corrective action underway and since anxiety off the Greece situation looks to be tempered, the market should be able to bounce off US data flows.

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With US economic numbers disappointing the trade, the Greece situation remaining unsettled and the Obama Administration setting the stage for yet another assault on Health care reform, there are clearly more bearish influences than bullish influences in the marketplace. With Washington aiming its blame gun at health insurers and Congress moving to repeal a Federal Antitrust exemption for health insurers, it would appear that another industry is about to be ransacked. Typically seeing the US Federal Reserve Chairman promise lingering low rates is seen as a positive and at times the stock market yesterday even seemed to rally off the idea that soft US numbers would insure lingering low rates. In other words, the market tried to shift back into a position where soft numbers serves to temper the fear of higher rate. However, the market doesn’t even seem to be able to consistently embrace the soft number/higher equities theme, perhaps because some don’t believe the Fed, while others are just afraid of further anti growth measures coming from Washington. Mix in what could be a deteriorating Greece situation and there appears to be more risk than reward in the current market.

S&P 500: Critical up trend channel support is seen at 1094.80 today, but we have to think that support levels could be violated, given the docket of political and economic events scheduled for today. In fact, to alter the down trend pattern in the S&P would probably require a rally back above 1105.20. If the durable goods report disappoints early today, we suspect that bearish sentiment will dominate.

DOW: With a pattern of lower highs in the March Mini Dow this week, it would seem like the bear camp has the technical edge. In fact, the market was unable to benefit from potentially supportive corporate headline news and clearly the scheduled macro economic news this week has been discouraging. Today the markets probably won’t have as much support off Fed testimony (because it is the second day of testimony) and that could make the mid day auction results a bit of a negative for equity market sentiment. Critical support in the March Mini Dow looks weak at 10,299, with the market potentially unable to avoid a slide down to and below 10,250.

NASDAQ: Like the Mini Dow, the Nasdaq has a pattern of lower highs on the charts and it is likely that the March Nasdaq will see a slide below the even number 1800 level today. With a lower early US trade this morning being seen despite a series of favorable corporate earnings news items from the European markets it is clear that the trade is still looking at the glass as half empty. Critical up trend channel support is seen today at 1797.65, but we can’t argue against a return to the February 23rd low of 1785.

TODAY’S MARKET IDEAS: Too little reward seen today in the face of rising political and economic uncertainty.

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The stock market forged a very impressive extension of its recent upward track yesterday and is seemingly set to add to that effort early today. We continue to see the 1100 level in the March S&P as a critical resistance zone but for the next few trading sessions, it would seem like the bull camp is capable of extending its control. We are not sure if the continuing shift in political power in the US is behind the recently improved sentiment, or if the improvement in sentiment is being derived from favorable corporate earnings or from the 30 day grace period for Greece, but the trade does seem to be spinning the headlines into mostly favorable stories. At least in the early action today we saw financial/bank sector stocks mounting gains in the early European trade and that looks to start the US action out on a slightly positive tilt. However, sentiment isn’t definitively positive and the bull camp in stocks probably needs distinct help from both the US Housing starts and permits reports and also from the US Industrial Production/Capacity Utilization readings. So far, it is unclear how the markets will react to news of another “bi-partisan” debt reducing effort from Washington, mostly because cooperation in Washington has become a very rare event. In conclusion, we suspect that the numbers will be partially acceptable today, but that gains today will probably be smaller than yesterday.

S&P 500: Unlike other sectors of the market, the March S&P hasn’t managed an upside breakout on the charts. However, the S&P has managed to extend the recent pattern of gains and did forge a higher high for the move this morning. Initial support is seen at 1093.90, with initial resistance seen up at 1101.50. At least into the opening today, we concede to a bullish edge in the market, but we are not sure if a negative US housing permits reading will fully take the edge away from the bull camp.

DOW: With the March Mini Dow managing to post some positive early action this morning and in the process managing to forge a quasi upside breakout on the charts, one has to leave the edge with the bull camp. Unfortunately, we doubt that the first set of scheduled US data will provide a conclusively bullish reading from the US housing front and that could diffuse a portion of the early bullish tilt. At least into the opening today, support in the March Mini Dow moves up to 10,241, with initial resistance pegged up at 10,310.

NASDAQ: Like the Mini Dow, the Nasdaq has also managed an overnight extension of the recent bull track, with the March Nasdaq reaching the highest level since January 28th. Apparently the smaller cap stocks are being pulled higher by favorable views toward financial and large cap stocks and that leaves the bull camp with a slight edge into the US opening today. Initial support in the March Nasdaq is currently seen at 1797.75, with resistance today pegged at 1808. For the time being, the broad macro economic view looks to be the main factor driving stock prices.

TODAY’S MARKET IDEAS: The bulls still have the edge but upside momentum looks to be waning and the bulls probably need some help from the numbers.

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While the markets are showing some rebound action in the early going, we don’t get the sense that the market has pivoted off a deck clearing fundamental development. In other words, the recovery effort this morning seems to be mostly a technical anomaly, with the trade still generally concerned about the EU debt situation. About the most positive development, is that severe weather in Washington has effectively eliminated the flow of political uncertainty temporarily but even that lucky break isn’t expected to last for long, especially with Bernanke scheduled for a grilling on Wednesday. With the US economic report slate today somewhat inactive, with only a Wholesale trade release, one shouldn’t expect a sudden improvement in overall psychology. We do think that the equity markets might derive a small measure of support from the first leg of US Treasury auctions later today, as high demand for US 3 Year notes might send a message that rates are likely to stay low for the foreseeable future. In fact, with a Fed member yesterday suggesting that the Fed would wait until the 2nd half of the year to begin asset sales and also suggesting that they would wait until after the asset sales begin before hiking rates, the market should be confident that rates for now are destined to remain low. In short, the market can periodically bounce, but we don’t get a sense that the bear tilt has been discarded yet.

S&P 500: Until the March S&P manages to regain and hold above 1070.40 we will assume that the trend is pointing down. As suggested already the trade continues to fret over the prospect of EU debt problems under the surface and the trade also seems to think that the pace of the US recovery remains in question. Perhaps the market will get a temporary lift from the US Treasury auction or perhaps the market will get a fleeting lift off the promise of another US jobs bill, but we are not sure that the market will find the news to fully throw off the negative bias that has dominated the trade since the middle of January.

DOW: While the March Mini Dow is showing signs of returning to the 10,000 level in the action this morning, we continue to see more risk to longs than potential reward. As suggested already, we wouldn’t be surprised to see a bit of a bounce into mid session today, in the wake of the US Treasury auction, but we ultimately think that prices are destined to work even lower. While some bulls might be banking on a key low in the face of a Senate jobs bill announcement, the market wasn’t upbeat toward that prospect when it was initially announced. While traders and investors aren’t overly negative toward prospects, we aren’t sure that a single economic report or some statement from Washington is capable of suddenly shifting the trend securely back to the upside. We would be a seller of rallies in the March Mini Dow to 10,000 perhaps even after a knee jerk reaction to Coke earnings today.

NASDAQ: Like the rest of the marketplace, the March Nasdaq has forged a recovery attempt in the early action today and we would not be surprised to see an additional lift provided by corporate earnings news, but we just don’t think that corporate earnings or a third tier US economic reading is capable of taking the negative tilt completely out of the equity markets. However, those looking to get short this market, might wait until after mid day to step into short side positions. In fact, one should probably wait for a bounce back above 1756 in the March Nasdaq to re-enter a short side trade.

TODAY’S MARKET IDEAS: The bull camp might be able to control for the first half of the trading session but we fear that the afternoon will bring on the sellers again.

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The stock market remains in a bad position, as the US has spent its way into a massive hole and it would seem like the US economy is in need of even more spending to nurture forward progress in the economy. Maybe Obama will say tonight that he is going to fully halt spending immediately after his term is over. While the market didn’t make too much out of the sharp decline in existing home sales earlier this week, weakness in housing figures has already fostered talk that the US housing market is still unable to carry its own water. Therefore, we suspect that the new home sales report this morning will be fairly critical and it is imperative for the bull camp that something positive is seen from the data, as the market remains vulnerable off a host of themes. In fact, with favorable US corporate earnings reports generally taking a back seat to macro economic and political concerns, the best outcome from the State of the Union address tonight, might be to see less initiatives pouring forth from Washington. Usually we would expect to see a stock market bounce in the wake of the FOMC statement early this afternoon and we would also expect to see a run up Thursday, when Bernanke is confirmed, but in the current condition, business leaders and investors just have too many uncertainties to be pulled back into the stock market in big numbers. Instead of predicting a rally, we think the market needs good numbers, a good auction and a favorable FOMC statement just to avoid more weakness.

S&P 500: It looked like the S&P might be able to forge a classical reversal signal on the charts yesterday but that hope was dashed with a late slump. Clearly the economy lacks momentum, political uncertainty is extremely high and the markets are also off balance because the Chinese are enforcing prior tightening intentions. As suggested in other sectors today, the bulls might catch a minimal lift off the scheduled data flow this morning and that upward tilt might be fanned by the US action and by the FOMC statement, but on any bounce today, we would think that those holding longs into the close, would be facing a significant risk into the next round of Obama initiatives. Critical support is seen down at 1081, with even lower support seen down at 1073.

DOW: With the markets failing to post a key reversal after another new low move yesterday, the technical bias remains with the bear camp. In looking at the totality of the fundamental case, the bear camp would also seem to have the edge. As suggested in the introduction today, the Mini Dow probably needs a series of favorable developments just to keep the selling pressure to a minimum. After the biggest stimulus program in the history of the US seen last year, it would seem like Obama is poised to push child care credits and a further pounding of Wall Street, as the solution to further slowing. All things considered, Obama has painted himself into a corner by offering up the promise of a spending cap, when it is possible that more stimulus efforts will be needed. While the market might forge a weak rally off housing news, the auction and the FOMC statement, we doubt that the trend is going to be pointing up into the close today.

NASDAQ: While the bull camp might want to point to a collection of closes around the 1797.70 level, as some sign of consolidation support, the big picture look on the economy is suspect and overall uncertainty abounds. In addition to a Congressional grilling of Geithner today, the market is also seeing the end of the grilling of Bernanke and it is also likely that some portions of the press will be poised to grill the President after his speech tonight. In short, strong tech sector earnings did nothing for the market and we suspect that nothing will support stock prices, until they get cheap enough to equate to the lack of direction in the economy. Initial support is seen at 1785 and then again down at 1774 and therefore we have to leave the edge with the bear camp.

TODAY’S MARKET IDEAS: Too much uncertainty and little if any interest in favorable earnings news suggests that the bear camp retains control over prices. It might pay to buy a near to expiration option strangle.

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The overall look this morning isn’t very beneficial to the bull camp, as the Chinese performed another indirect tightening type maneuver overnight, German ZEW readings were a little disappointing and JAL finally declared bankruptcy. One could also note a rather HOT annual inflation reading from the UK overnight and residual weakness in European banks and financial sector stocks. On a positive tilt, the trade might be capable of garnering some support from IBM earnings after the close today, but only if the Citigroup earnings ahead of the opening today are favorable. Other developments that might have stirred the bull camp but didn’t was news that Kraft boosted its bid for Cadbury overnight. Weakness in oil shares is also contributing some downward pressure in energy related shares and therefore it would appear that a very weak downward bias is in place this morning. We don’t see much in the way of anxiety toward the recovery question, but we do get the feeling that the market could wander lower on the charts, unless Citigroup earnings are positive and the NAHB Index around mid session provides the market something positive to embrace. Overall, our feeling is that equity prices are still being seen as expensive in the face of a recovery view that has been downgraded somewhat.

S&P 500: A seven month up trend channel support line in the March S&P is seen down at 1127.50 today and that level is also a close key level from last week’s lows. On the other hand, with the January 12th Commitment of Traders with Options report for S&P 500 Stock Index showing the Non-commercial position to be net short 1,430 contracts, with the Non-reportable position net long 49,654 contracts, that made the “combined” spec and fund position net long 48,224 contracts as of early last week. Therefore, we can’t argue with some more shallow declines ahead, as the macro economic outlook just isn’t favorable enough to throw off the liquidation tilt and in turn shift the bias back to the upside.

DOW: A little more Chinese tightening overnight combined with news of a possible death toll in excess of 200,000 in Haiti looks to leave the Dow in a vulnerable position. As suggested already, we get the sense that the market is a little expensive in the face of somewhat suspect macro economic growth patterns. Naturally the Citigroup earnings will set a large portion of the tone from the trade early this morning but unless those earnings are surprisingly strong, we don’t get the sense that the early earnings news will provide a sustained shift up in sentiment. However, with the January 12th Commitment of Traders with Options report for Dow Jones Index $5 only showing a “combined” spec and fund position that was net long 17,763 contracts as of early last week, the market is probably only marginally net long after the slide last week. However, a 7 month old uptrend channel support line is seen at 10,546 today and the failure to hold that level early today might result in a slide down to even numbers of 10,500.

NASDAQ: The Nasdaq comes in the action marginally above last week’s muted attempt to bounce and in what seems to be a corrective mode. With the January 12th Commitment of Traders with Options report for Nasdaq Mini showing the Non-commercial position to be net long 19,854 contracts, with the Non-reportable position net long 12,707 contracts, that made the “combined” spec and fund position net long 32,561 contracts as of early last week. Therefore, the Nasdaq was a bit overbought and it probably remains vulnerable to more classic type selling today. However, we suspect that the IBM earnings could contribute some underpin to the Nasdaq and the tech sector after the close today. Unfortunately up trend channel support in the March contract doesn’t come in until 1828, but a closer in support and pivot point is seen at 1861.

TODAY’S MARKET IDEAS: A minimal downward bias remains in place, with little in the way of anxiety present in the marketplace early this morning. We would explain the market as disappointed instead of concerned with the economic track.

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Follow through gains were seen again overnight and with a large number of talking heads this morning touting more seasonal strength today ahead of the coming holiday, we are somewhat skeptical that prices will be able to drive higher throughout the shortened trading session. However, the US scheduled data looks to be supportive and without a negative headline development to trip up the bull camp, it might be difficult to take control of this market away from the bull camp. Apparently the market either sees the potential passage of the Health care bill as a positive development, or perhaps the market is simply relieved that the uncertainty from the process is about to come to an end. News of merger and buyout activity has also contributed to the upward tilt this week, but it is also clear that a certain amount of buying this week was indeed the result of improved macro economic psychology. With the possible passage of the Health care reform effort, Citi and Wells Fargo repaying TARP and some signs of improvement in the jobs market in November, one can say that the US economy comes to the end of the year, in a much better position than it started the year. We suspect that early momentum will manage to carry the markets to a higher close, especially since the trade ends at mid session today.

S&P 500: Up trend channel resistance is seen up at 1121.70 today and that resistance rises to 1122.25 on Monday. At least in the early action today, traders should expect the bull camp to attempt to push prices even higher. However, we also get the sense that the market is becoming overbought and that the bull camp might need dual confirmation of a good economy, from the claims and durable goods reports just to leave the bulls in control for the entire shortened trading session. We would remain bullish until the March S&P falls back below the 1115.60.

DOW: All things considered, the action in the Mini Dow this week has been disappointing, as other sectors of the market have forged a series of fresh new highs for the year this week and the Mini Dow this morning sits as much as 80 points below the 2009 highs. Unfortunately for the bull camp, up trend channel support in the March Mini Dow doesn’t come in until the 10,278 level, with that support level rising to 10,298 on Monday. Initial resistance today in the March Mini Dow is seen at 10,450, but positive momentum in the rest of the market might serve to pull up the Dow slightly early this morning.

NASDAQ: News of ongoing merger and buyout activity, as well as favorable holiday sales expectations has given the tech sector an ongoing lift overnight. Up trend channel resistance in the March Nasdaq is seen at 1857.75 and that could serve as a profit taking point by some, especially if the next critical Health care vote is completed before the close today, as that could create a political anti climax of sorts.

TODAY’S MARKET IDEAS: Expect the bulls to control out of the gate but traders might bank profits if the early scheduled numbers fail to distinctly extend the rally.

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With a mostly favorable start to the new trading week, the bull camp seems to have picked up where it left off at the end of last week. Apparently seeing a formal bailout for Dubai added to the bullish resolve this morning. However, with the S&P still sitting below the old highs, a portion of the market is concerned that this market lacks the capacity to run up to a new even higher trading range ahead. However, with the US economic report slate empty today, that could allow the early bullish attitude to remain in place. It is possible that the US retail sales readings from last week will continue to lift the market in the absence of fresh economic data today. One has to wonder if the White House meeting with key US bankers will yield anything surprising, as the press is suggesting that the President is poised to press bankers on their lack of lending activity. While we concede to a slight upward bias today, the biggest risk to the bull camp might be the lack of bullish resolve and that could mean that prices could chop around after the initial thrust upward.

S&P 500: At least in the early going today, the March S&P would seem to have initial resistance at 1112.00. While the December 8th Commitment of Traders with Options report for S&P 500 Stock Index showed the Non-commercial position to be net short 21,988 contracts, with the Non-reportable position net long 95,928 contracts, that made the “combined” spec and fund position net long 73,940 contracts as of early last week. With the S&P to the overnight high, sitting as much as 28 points above the level where the COT positioning was measured, we suspect that the net spec long positioning is getting closer to the classic overbought level of 100,000 contracts. At least in the action this morning, we can’t rule out more new highs, but later in the week, into the FOMC statement release, we would suggest that longs should be picking a point to exit on the early rally this week.

DOW: With a fresh new high for the year forged in the early action today, the March Mini Dow would seem to be on track for an impressive trading session. However, as suggested already, we are skeptical that the market will be able to attract consistent buying interest and in turn rise significantly above the 10,500 level. While the December 8th Commitment of Traders with Options report for Dow Jones Index $5 showed the Non-commercial position to be net long 16,560 contracts, with the Non-reportable position net long 202 contracts, that made the “combined” spec and fund position net long only 16,762 contracts as of early last week. However, that positioning is clearly understated by the noted gains forged after the COT report was measured. To this morning’s highs, the Mini Dow had already forged a rally of 300 points from the level where the COT report was calculated. Critical support and a possible pivot point into the close today, is seen at 10,440.

NASDAQ: The March Nasdaq appears to be lagging behind the rest of the market in the early going today, as the Dow appeared to reach new 2009 highs in the overnight trade and the March Nasdaq wasn’t even able to rise above last week’s highs. Even more surprising, is the fact that the December 8th Commitment of Traders with Options report for Nasdaq Mini showed the Non-commercial position to be net short 7,085 contracts, with the Non-reportable position net long only 2,266 contracts, and that made the “combined” spec and fund position net short 4,819 contracts as of early last week. In other words, the Nasdaq as of early last week, was still “net spec” short and therefore it might have the most residual technical buying capacity in reserve. Critical support and a possible important pivot point into the close today, is seen at 1794.

TODAY’S MARKET IDEAS: The bulls look to control early this week, with the biggest threat to the bull camp coming from lackluster investment interest.

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The stock market in most cases remained right on or into new highs for the year into the US Thursday morning trade. Apparently the stock market was able to spin the US scheduled data yesterday into a positive, despite the fact that the headline readings didn’t seem to show positive progression. Even more surprising, is the fact that the market doesn’t seem to be discouraged by a missed November same store sales forecast from discounter Costco, perhaps because the Costco figures were still above prior figures. However, the market might be seeing some positive lift from the financial sector, which saw signs that Bank of America was poised to pay back their government funds. Perhaps the stock market is being lifted by favorable economic views from a series of Fed members overnight and perhaps the market is generally being cheered by the fact that 8 of 12 Fed districts showed the prospect of improvement in the Fed Beige Book release yesterday afternoon. Therefore, the bull camp looks to retain control over the near term trend unless the initial claims posts a larger than expected decline in its weekly readings later this morning. We are somewhat surprised that the talk of an exit strategy for portions of the historical easing effort hasn’t caused some concern in the marketplace, perhaps because a large portion of the trade thinks it is still premature to consider exiting the ultra easing posture. Therefore, the trend looks to remain up today unless there is a headline development that derails bullish sentiment.

S&P 500: As suggested already, the December S&P has managed a fresh new high for the move in the early going today and that would seem to embolden the bull camp. However, the market will be presented with a series of potentially critical initial and ongoing claims figures, which are made even more important by the close proximity of the monthly payroll report on Friday. As in the rest of the equity markets, we have to leave the edge with the bull camp until there is a definitively negative shift in the macro economic wind. The outlook for the economy isn’t overly impressive, but the trade has recently spun the data in favor of the bull camp. Near term critical support in the December S&P is seen at 1111.40 and then again down at 1108.40 but at least into the opening today, the bull camp looks to retain control over prices.

DOW: While the December Mini Dow hasn’t made a fresh new high for the move this morning like the S&P, it does sit within relatively close proximity to its 2009 highs. Apparently the blue chip stocks are cheered by the news that another major financial player is planning to pay back its bailout funds. With the top of the up trend channel sitting at 10,507 today, it might not take much upside action to result in yet another upside breakout on the charts. In our opinion, the path of least resistance in the Mini Dow is pointing upward, unless the December contract fails to hold above 10,461 in the early action today.

NASDAQ: The December Nasdaq continues to lag behind the rest of the market, with prices still sitting well below the mid November highs. In fact, it would seem like the December Nasdaq is content to waffle around both sides of the 1800 level until some more definitive news is seen on the status of the US economy. We have to think that the path of least resistance is pointing weakly to the upside and that the Nasdaq will probably follow in the footsteps of larger cap stocks over the coming two trading sessions. A critical support point is seen at 1792 today and as long as that level holds in the early going today, we will leave the edge with the bull camp.

TODAY’S MARKET IDEAS: A minimally bullish bias remains in place this morning but the market might need some help from the US numbers to extend the early gains.

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The stock markets have followed through on the downside thrust seen into the Thanksgiving holiday. However, with the Dubai debt standstill rekindling fears of global financial sector troubles again, the health of the global economy is somewhat given a back seat. While Dubai world is a private company, it is owned by the Dubai government and therefore the debt standstill is seen as a very troublesome situation. Many traders are fearful that the losses in Dubai will have an echo impact on other funds and banks and therefore anxiety is running somewhat high in the early action today. With the market fresh off a distinct failure on Wednesday, the downside extension in prices this morning is probably kicking off some classic technical stop loss selling pressure. While the UK equity market was trying to throw off the negative impact from the Dubai situation early today, the markets were also confronted with a slight worsening of Euro zone Consumer Confidence. While the stock market has shown pre-holiday and Black Friday strength in the past, we have to think that outside market influences are destined to overshadow positive thinking today.

S&P 500: The December S&P comes into the Friday morning action under noted pressure this morning, but at this hour the S&P was able to bounce rather impressively from the initial lows. Up trend channel support in the December S&P is seen at 1062 and it could take a rise back above the 1083.70 level to fully shake off the negative tilt in place this morning. While the net debt at risk is supposedly pegged at only 16 billion in the Dubai situation, there is no guarantee that the debt issue in Dubai won’t chain reaction into other entities. While the market might attempt to regain the early losses, we are not sure that the anxiety can be quickly erased from the markets mentality.

DOW: While the December Mini Dow did see a sharp downside extension early this morning, (as of this writing) the December contract was as much as 112 points off the initial low. Nonetheless the Dow looks to start the session out 23 points lower and 264 points below the November high. While the December Mini Dow might be able to respect close-in support of 10,158, the path of least resistance might remain down, unless the market can muster enough positive anecdotal Black Friday sales data, to reverse negative sentiment. We would also expect a large portion of the volume to be seen in the morning action, as the trade tends to thin out well ahead of an early closure.

NASDAQ: While the December Nasdaq saw a sharp downside follow through in the early action today, it has also managed to throw off a large measure of that sell off attempt. In fact, it would seem as if the December Nasdaq has found solid support at the 1750 level and that level might be able to hold if the trade can place a net exposure on the Dubai debt situation and return its attention back to the recovery question. In order to throw off a large portion of the bearishness facing the trade this morning, probably requires an early morning rise back above the 1755.75 level.

TODAY’S MARKET IDEAS: The path of least resistance is pointing down, with the Dubai situation merely adding into the pre-existing negative bias from early in the week.