The Hightower Report

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The stock market enters the Wednesday trade somewhat oversold but generally seeing weakness from the Asian markets overnight. The trade was presented with a $39 billion BHP offer for Potash, but BHP tempered that offer impact with statements that they would not buy assets regardless of their price. The market might also garner some support from the prospect of a possible bidding war in the US tech sector. The market might also have garnered some lift from a better than expected German Ifo survey that was released overnight. With the added potential for a slightly positive US durable goods report later this morning, and hopes that the US Fed might shore up confidence in a “get together” later this week, it is possible that the bull camp will have some ammunition today to match up against the ongoing flow of double dip recession talk.

S&P 500: International equity markets seem to have regained some footing after general weakness was seen in Asian markets overnight. A favorable German Ifo reading and news of a possible buyout offer in the tech sector might be distracting the market from the double dip recession mentality, that seemed to be gripping the market in the prior trading session. While the markets might quickly return to double dip recession views, in the aftermath of the US Durable Goods report release later this morning, the trade is expecting to see a gain or a positive reading from the scheduled data. In short, one shouldn’t be surprised in the face of a bounce early this morning, but the real test of the bull camp could be the sustainability of the upside tilt. Our pick for a short covering target on the upside is 1055.00 basis the September S&P contract.

DOW: The September Mini Dow contract appears to have carved out a trading range above the even number 10,000 level in the overnight action. Renewed buyout news was seen from a couple different areas of the market overnight and some traders think that type of news might serve to underpin market sentiment today. Expectations for Durables and new home sales generally expect “positive” readings later this morning, but investors should be expected to remain on edge in the face of any scheduled US number release. We would expect the market to show some positive action in the face of the scheduled numbers this morning but we would also expect that optimism to wear off rather quickly and the fear of future slowing to return before the close. In conclusion, a short covering bounce is possible, but we are not sure that the market can expect to fully throw off the bearish tilt unless the numbers are much better than expected this morning.

NASDAQ: News of a possible bidding war for a tech sector asset might provide the Nasdaq with some support today, especially since the market also saw a fresh bid from BHP for Potash. As in the upper end of the market, the Nasdaq bulls really need to see scheduled US data that counters the double dip recession track somewhat, as the slowing fears appear to have become even more entrenched in the face of the massive decline in existing home sales on Tuesday morning. We continue to think that the September Nasdaq is poised for a retest of the 1750 level but the market might see a temporary bounce this morning before resuming the downside track in prices.

TODAY’S MARKET IDEAS: The market can bounce but we seriously doubt the bull camp can engineer anything beyond a temporary technical balancing on the upside. In order to stop the down trend pattern would seem to require a game changing development and without a much stronger than expected Durable goods report result later this morning, we aren’t sure where the market will get something that dramatically improves and entrenches positive macro economic sentiment.

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Fears of softening domestic growth in China and the lack of a positive reaction to the FOMC meeting in the US leaves international stock markets under some pressure overnight. Shanghai stocks were up slightly but Hong Kong was down. The market seemed to “need” good reasons to see a continued uptrend above 3 1/2 month highs but economic data remains sluggish and traders see a slower growth pace out of China as a concern. Tuesday morning’s flow of U.S. economic data did little to relieve the negative tone. In fact, U.S. 2nd quarter productivity showed the first decline in six quarters to post results that were below expectations. Both June Wholesale Inventories and Sales figures came in below expectations and served to add to the already fragile sentiment. The post FOMC meeting comments made note of the recent slowdown in economic data, and that the Fed would use proceeds from maturing mortgage securities to purchase longer term treasuries in an effort to support the economy. While stocks saw a rally on the decision, the market failed to move higher. Many traders see quantitative easing as “pushing on a string” as weak demand for credit has helped keep economic numbers sloppy even with low interest rates and plenty of liquidity. Perhaps news that the House passed the $26 billion state bail-out package helped to add to the bearish tone for the market as funding is coming from increased taxes on multinational companies. US Trade data will be monitored today.

S&P 500: The market spent part of seven trading sessions in a fairly tight consolidation and a surge higher in the US dollar and sluggish growth news from China are seen as negative forces and the market failed to find good reasons to attract new investors. Look for selling resistance today at 1108.50 and 1111.40 for September S&P with 1088.80 and 1082.40 as downside objectives.

DOW: Moving below yesterday’s lows in overnight action could show the sensitivity of the market to the global economic tone. September e-mini Dow futures even took out Friday’s lows overnight. The technical action looks weak and the market looks vulnerable to give back a portion of the solid gains seen since the July lows. Selling resistance for the September e-mini Dow is at 10,550 with 10,403 and 10,315 as next support.

NASDAQ: There were a number of company downgrades from major Wall Street banks, with the most notable a downgraded of Intel’s 2010 growth outlook, and that seemed one of the catalysts that weighed on the tech sector. A build up in PC components at various Asian locations was also seen as a concern and Advanced Micro Devices was also cut from “overweight” to “equal weight” from another bank. Failure to move over Monday’s highs and penetration of the July-August uptrend channel turns the technical picture bearish for September NASDAQ. The market should encounter stiff resistance near 1880.00 today with 1833.60 as downside target.

TODAY’S MARKET IDEAS: The market needed reasons to attract new buyers but economic news is turning a bit more negative and some long liquidation selling appears likely over the short-term. The market may face a period of uncertainty regarding policy, taxes and employment and uncertainty normally sparks selling.

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The stock market looks to be in a liquidation pattern today, as the reward for being long this market continues to be limited by rather limited expectations for future world growth. While the market saw some fresh developments from the Euro zone financial front this morning, the bank stress tests results won’t be made public until July 23rd and therefore the influence of the distribution of the stress test criterion isn’t expected to be a major deal today. However, with the string of US data over the last month clearly pointing to fresh slowing, investors are likely to continue to dump holdings in the face of technical pressure. Even though the Nasdaq and S&P were found to be net spec short in the latest COT figures, the bounce yesterday was probably enough to balance those markets and in turn clear the way for more declines ahead.

S&P 500: Despite the big range down reversal recovery action on Tuesday, the S&P looks to start the new trading session out on a weaker footing. Critical downside support is seen at 1011.00 this morning but a return to the recent lows is likely as the market doesn’t look to have much in the way of a game-changer event directly ahead. In fact, news that BP was potentially poised to get some outside investment capital was mostly discounted this morning and that highlights a market that is focused on the negatives.

DOW: With the Mini Dow retaining a modest net spec long in the last COT report and the market bouncing yesterday that should clear the way for a return back to the sub 9,600 level. In fact, with the jobs market suspect again, the big cap stocks will have to rely on cost cutting and international business just to tread water. Therefore we see mostly risk and little reward for being long. Near term downside targeting is seen at 9,561 and then again down at 9,500, with the market not showing panic and anxiety, but investors in general expected to show a distinct lack of buying interest.

NASDAQ: After a very surprising rally attempt, the September Nasdaq appears to be back on the liquidation ropes again this morning. We see little in the way of support in the September Nasdaq until the 1709.00 level but we doubt that internal positive news flow for the equity is going to be enough to countervail a liquidation attitude in the marketplace. In fact, the market seems to be poised to turn the simple release of the Euro zone bank stress test criterion into a negative and that highlights a market that is looking for the negatives. As suggested before, we don’t see panic and anxiety selling but we do see a continued down trend pattern.

TODAY’S MARKET IDEAS: While there isn’t fear in the marketplace, there also isn’t much in the way of optimism presence in the market talk and that means rewards are expected to be limited while risks seem to be fairly significant.

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While the market is showing initial positive signals this morning, we fear for another dose of negative economic reality from the US scheduled data flows. While the G20 meeting apparently ended with the leaders making nice with each other, we didn’t see anything significantly beneficial from that meeting. We do think that stocks were lifted Friday by favorable news from Oracle, but we don’t see much in the way of important cyclical earnings news due out until Constellation Brands on Thursday. We still don’t expect to see anxiety in the marketplace off the scheduled data, but we do think that the ultra slow readings will send a message to investors, that risk is out of whack relative to reward. In the end, seeing US Treasuries near their highs this morning and seeing gold prices relatively close to their recent highs suggests that the flight to quality mentality is still a front and center item.

S&P 500: The September S&P comes into the action this morning right back to the Friday highs and that would seem to give the bull camp a technical edge to start the session. The next significant resistance level on the charts is seen up at 1080.20 today, but the real test of the bull’s resolve should come in the wake of a very active flow of US scheduled data this morning. Apparently the market has managed to avoid fresh concerning news from the Euro zone again this morning and apparently the market is also discounting the threat of a double dip recession. The Commitments of Traders Futures and Options report as of June 22nd for S&P 500 Stock Index showed Non-Commercial traders were net short 6,883 contracts, a decrease of 4,056 contracts. The Commercial traders were net long 20,718 contracts, an increase of 17,699 contracts. The Non-reportable traders were net short 13,836 contracts, an increase of 21,756 contracts which represents a change from a net long to net short position. Non-Commercial and Non-reportable combined traders held a net short position of 20,719 contracts and that could give the bull camp an initial technical edge.

DOW: While the September Mini Dow comes into the new week sitting close to the prior session’s high, we just don’t see the rational for calling an end to the downward bias that has been in place since June 21st. Certainly strength in European Bank stocks has provided the market with a positive start today, but we think the US scheduled data will generally remove the optimism and restart the downside track again. However, it will take a decline back below the 10,104 level, to give the bear camp the technical edge again. The Commitments of Traders Futures and Options report as of June 22nd for Dow Jones Index $5 showed Non-Commercial traders were net long 3,468 contracts, an increase of 3,297 contracts. The Commercial traders were net short 874 contracts, an increase of 6,820 contracts which represents a change from a net long to net short position. The Non-reportable traders were net short 2,594 contracts, a decrease of 3,523 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 874 contracts. These traders have gone from a net short to a net long position.

NASDAQ: While the Nasdaq starts the new week out on a positive note, we doubt that tilt will remain in control throughout the trading session. Certainly the Nasdaq is emboldened by the Oracle news from last Friday, as that suggests the tech sector is capable of operating in the face of a slowing economy. However, until the September Nasdaq manages a climb back above last Friday’s high of 1856.00, we will remain bearish toward prices. The Commitments of Traders Futures and Options report as of June 22nd for Nasdaq Mini showed Non-Commercial traders were net long 11,737 contracts, an increase of 31,086 contracts which represents a change from a net short to net long position. The Commercial traders were net short 15,303 contracts, a decrease of 26,422 contracts. The Non-reportable traders were net long 3,566 contracts, a decrease of 57,508 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 15,303 contracts. This represents a decrease of 26,422 contracts in the net long position held by these traders.

TODAY’S MARKET IDEAS: The bulls have initial control but the early numbers look to be the main threat to the trade today.

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While the S&P did manage to rise above the prior session’s high in the overnight action, the action on the charts isn’t overly impressive. While some equity markets were lifted overnight off rumors of a robust Chinese monthly export tally, that potential optimism was offset by news that Greece GDP was down by 1%. In our opinion, one might have expected the Greece GDP reading to have been down by significantly more than 1%, especially when one considers expectations for a complete disaster in that country. About the best Bernanke could do for the bull camp in comments yesterday, was to suggest that the US looked to avoid a double dip recession. Therefore, one can hardly get “bulled up” on stocks over the dialogue from the Fed, especially since the Fed’s Hoenig reiterated the need to hike interest rates before the end of the year. We continue to think that the longs are facing significant risk, for a fairly limited reward.

S&P 500: While the S&P did manage to rise above the prior session’s high in the overnight action, we don’t see a scheduled event that is expected to cheer investors. In fact, with the US Fed Chairman given a somewhat anemic view on the US economy yesterday, we have to think that most investors will prefer the sidelines given the limited reward potential in the marketplace. We think it will take a close back above 1066.10 in the June S&P to turn the trend back up. Near term downside targeting is seen down at 1047.50.

DOW: The June Mini Dow appears to have forged a quasi double top around the 9,946 level, but technically the Mini Dow has left a pattern of lower highs in place on the charts. We think the market missed an opportunity to rally off statements from the EU on Monday morning and without the prospect of favorable US economic data directly ahead, we just don’t see where the bull camp is going to get a definitive bullish catalyst to drive prices back up. In order to change our opinion on the downtrend status, we need to see two closes back above the 10,000 level. Until the trend is altered, we see little in the way of support until the 9,828 level.

NASDAQ: The June Nasdaq has continued to forge a pattern of lower highs on the charts and that should leave open the prospect of a return to the 1750.00 level in the coming trading sessions. The failure to see a distinctly favorable reaction to recent Apple news and to talk of favorable chip sale patterns overnight suggests to us that even the best sector of the equity market is unwilling to embrace positives and that suggests investors are still more worried about risk than they are of missing an opportunity on the long side.

TODAY’S MARKET IDEAS: Less anxiety today but the view toward the global economy is mixed as growth in China is discounted in the face of lingering uncertainty toward Europe.

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With fresh higher highs for the move and favorable international market action giving the bull camp an added resolve, we have to leave the edge with the bull camp. We suspect that part of the gains in the prior session were the result of seemingly favorable events in the US Gulf of Mexico. However, BP continues to suggest that the final result of the top kill effort won’t be known during the trade today and that could suggest that the market is already pricing in plugging of the leak. With the markets also seemingly downplaying the Euro zone debt contagion issue for most of this week, we would suggest that the bulls are likely to face moderate adversity early next week, if any part of their case falls apart over the long weekend. With the US scheduled to see some favorable Personal Spending and Income numbers this morning, that should leave the bulls with the edge. However, if there is a bump in the road for equities today, it might come in the wake of the consumer sentiment readings, as those readings might be impacted by the early May financial market debacle. We also think that Obama will continue to blast BP again today and in the pattern of this White House, they will probably attempt to use another disaster to push for aggressive reform and increased regulation and that could dent the optimistic tilt in place in the early going today. We also have to think that a number of longs with profits in their positions might be inclined to bank profits ahead of the long weekend, especially given the ongoing concern of problems from the Euro zone.

S&P 500: The June S&P extended its recent pattern of strength early today and we suspect that the scheduled US numbers and window dressing ahead of month end could carry the market even higher. Initial resistance is seen at 1107.00 in the June S&P, with somewhat critical support in the market this morning seen at 1096.60. Minimally favorable numbers might favor the bull camp but we fear temporary corrective action in the wake of the Michigan sentiment numbers and in the wake of any Presidential press conferences from the Gulf later in the day.

DOW: While the June Mini Dow has managed a fresh new high for the move in the early action today, the extension wasn’t significant. Therefore we can’t argue against more upside today, but we think that the bull case has become somewhat over extended. At least in the early hours today, we suspect that more window dressing buying is possible, especially if the June Mini Dow is able to consistently trade above the 10,250 level. Critical support in the June Mini Dow is seen at 10,196 and then again down at an old quasi double top of 10,182. As suggested already, we think that the market will be positive out of the gate, but scheduled data later in the morning and a long weekend ahead might prompt some longs to bank profits just prior to the close today.

NASDAQ: The June Nasdaq has barely managed a fresh new high for the move in the early action today but that probably won’t prevent the market from an upside extension in the wake of the early US numbers. Initial support in the June Nasdaq is seen at 1855.00 this morning with little in the way of resistance seen until the 1874.25 level. News that Apple passed Microsoft to become the largest tech sector company would seem to bring some positive buzz back to the market. In the end, we expect early gains to be followed by a setback from the highs just ahead of the close.

TODAY’S MARKET IDEAS: After a distinctly bullish early tilt we suspect that upside momentum could wane as the session progresses as those long this market might be enticed to bank profits rather than risk negative developments from the Euro zone over the long holiday weekend. In other words, the US market is closed on Monday and that could leave the market exposed to the opening next week.

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Despite some positive leadership from bank shares in the European markets this morning, the US early trade is hardly definitively positive in the Thursday morning action. However, ongoing weakness in Asian equity markets overnight and a 24 hour strike in Greece would seem to leave a large measure of unease in the marketplace. At least in the short term, the talk of an expansion of naked short sales might be giving some pause to the bear camp. While scheduled US data hasn’t been given much attention lately, we are doubtful that the claims data this morning will provide any lift for stock prices as expectations for this week and recent data from that area hints at a softening of the US job market again. In short, it might take a very big headline type development that in effect is a game changer just to alter the downward tilt in stock price. For the time being, we suggest that traders continue to sell minor rallies expecting the overall trend to remain down.

S&P 500: While an inside day appears to be ahead in the S&P, we have to leave the path of least resistance pointing downward. There is a down trend channel resistance line up at 1128.65 today, but that line falls down to 1119.50 on Friday, as the slope of the downtrend pattern has been very aggressive for the last two weeks. Therefore traders should be prepared to sell minor rallies, with initial support this morning pegged at 1105.30 and then again down at even numbers of 1100.00.

DOW: The bull camp hopes to make something out of the fact that the June Mini Dow has managed to hold and trade well above the prior session’s low. The bear camp will suggest that the June Mini Dow remains well below the prior session’s highs and that volume on downside days, is still exceeding volume on upside days. As suggested already, this market needs something fresh and very “hopeful” on growth prospects to take attention away from the raging debt crisis but it would not seem like the scheduled data today will provide any fodder for the bull camp. Resistance would seem to be thick at 10,456 and there should be little if any support on the charts until the 10,300 level.

NASDAQ: A pattern of lower highs and lower lows should leave the bear camp in control again today. We see initial support on the charts at 1850.00 but there isn’t anything magical about that level given the rather significant fundamental challenges facing the market. In our opinion, the number one over ridding fundamental problem is the potential for much slower growth, off a wave of global austerity programs. With the prospect of slower growth and earnings, it would seem like investors are facing limited rewards and significant risk and that would seem to justify a down trend pattern in prices directly ahead.

TODAY’S MARKET IDEAS: Assume the trend is down but given the propensity for achieving a short term oversold standing, selling rallies is advised. Unfortunately the market might need to see another big range down exhaustion washout and recovery within a single trading session to signal a key low has been made.

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With an explosive rally well underway ahead of the Monday US opening, it is possible that a number of shorts are destined to be forced out of position. Clearly the markets were excessively bearish around last week’s lows and for good reason, because it appeared that the EU was poised to throw off an underwhelming aid package for Greece in the face of what appeared to be full blow EU debt contagion. Clearly many in the markets didn’t expect to see such a robust EU stabilization plan and certainly the markets didn’t expect to see a coordinated currency swap operation to give the plan some added teeth. Some in the market are pointing to the better than expected US Non Farm payroll report from last Friday as a sign that equities had become moderately undervalued. While we doubt the sustainability of the broad based positive euphoria in place early this morning, it might be folly to doubt the optimism today.

S&P 500: The S&P is streaking back toward levels seen at the beginning of May. As mentioned in other sections this morning, the real panic seemed to gain momentum around May 3rd and 4th and therefore we have to think that the S&P is capable of a quick return to that level in the coming trading sessions. The low on May 4th was 1164 but a real downside breakout on the EU situation took place up at 1177.80 in the June S&P. With the combined spec and fund positioning in the S&P as of May 4th showing a net long position of only 330 contracts and then seeing an added decline of 112 points, we have to think that the S&P could have seen the biggest net short positioning since the middle of 2008! Therefore, one should not under estimate the amount of short covering that could be seen in the coming trading sessions. Initial resistance is pegged at 1164, with secondary resistance seen at the 1175 level.

DOW: In looking back on the Mini Dow action over the last two weeks, one gets the sense that the real panic off the Euro zone situation started on May 4th and that might allow the market to rebound back toward the 10,892 level, with really significant resistance on the charts seen back up at 10,916. The Commitments of Traders Futures and Options report as of May 4th for Dow Jones Index $5 showed Non-Commercial traders were net long 12,511 contracts, a decrease of 5,727 contracts. The Commercial traders were net short 11,867 contracts, a decrease of 5,591 contracts. The Non-reportable traders were net short 644 contracts, a decrease of 135 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 11,867 contracts. However, from the COT report mark off to the low last week, the June Mini Dow managed a further decline of 1,052 points and therefore the spec long positioning was probably pulled down significantly. We see an initial upside targeting of 10,771 today, and perhaps a rise to even higher resistance of 10,818 on Tuesday morning.

NASDAQ: The June Nasdaq has forged a rather impressive recovery wave this morning, with the market potentially poised to regain the 1950 level in the coming two trading sessions. In fact, we see the 1950 level as some form of bull/bear line and we expect the market to spend a lot of time this week above that level. The Commitments of Traders Futures and Options report as of May 4th for Nasdaq Mini showed Non-Commercial traders were net long 14,444 contracts, a decrease of 6,748 contracts. The Commercial traders were net short 43,514 contracts, an increase of 383 contracts. The Non-reportable traders were net long 29,070 contracts, an increase of 7,131 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 43,514 contracts. With the Nasdaq from the COT mark off to the low last week seeing a decline in excess of 200 points, the markets were certainly factoring in a major global financial meltdown. While the EU plan might not be the full solution, the coordinated effort is big enough that most flight to quality sellers are probably going to forced back to the sidelines.

TODAY’S MARKET IDEAS: At least a temporary all clear on the debt front, with a severely oversold market in need of a couple days of short covering.

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In the wake of a close near the lows of the day in the prior trading session, there would not seem to be a sign that a major recovery is in the cards today. In fact, we suspect that the majority of the initial gains this morning are the result of simple technical balancing from a compacted oversold condition and not because of improving fundamentals. Apparently the Germans continue to see internal turmoil on the aid package to Greece and that in turn has allowed imaginations run wild on a possible domino effect slide of debt problems throughout the Euro zone. While the overnight headline flow didn’t seem to contain any fresh bombshells, investors are still very much on edge about the whole situation. In fact, the market didn’t seem to care that Euro zone Service sector PMI readings overnight came in at the highest level since October 2007 and we suspect that the US markets won’t be cheered much by news of an improvement in a private US jobs survey. In other words, the market currently thinks that evidence of growth is positive, but with the Euro zone debt situation potentially capable of derailing growth, it is clear that the bull camp has been rocked backward on its heels. There might be a temporary technical bounce but one can hardly expect an all clear on the Euro zone debt situation.

S&P 500: There wasn’t a big range down reversal signal yesterday in the wake of the hard down washout move. However, the S&P might be capable of an initial bounce today but lingering Euro zone debt fears look to continue to gloss over favorable economic data flows. We would peg initial resistance at 1176.80 today but the failure to hold above 1171.10 in the June S&P, would seem to put control of the market right back in the hands of the bear camp.

DOW: It isn’t surprising to see the June Mini Dow manage a slight technical bounce today, as the downside action in the prior trading session certainly left the market over extended. However, even with some Dow stocks attempting to hold up yesterday morning, it was clear that broad based negative sentiment was simply too much for even the big cap stocks. We see a very critical support point on the charts today at 10,848 and the inability to hold that level could rekindle widespread anxiety again. The inability to benefit from talk of a possible Goldman settlement with the SEC and the lack of lift off favorable UBS earnings overnight highlights this markets lack of interest on potential positives!

NASDAQ: As in the Mini Dow, the Nasdaq is showing some technical bounce this morning, but one doesn’t get the impression that an all clear has been seen on the big picture negatives facing the markets. With the Nasdaq potentially more overbought than other sectors of the market, that could mean that the Nasdaq could be the last sector of the market to become oversold. Therefore after a minor short covering bounce this morning, traders should probably prepare for a resumption of the downside bias, as the Euro zone debt situation appears to have a shelf life. Critical pivot point support in the June Nasdaq is seen at 1962.25 this morning, with potentially solid resistance seen up at 1975.00.

TODAY’S MARKET IDEAS: The bear camp retains overall control even if the US market shows some upside action this morning.

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Asian equities were lower this morning because of discouraging earnings news and European equities appeared to be down moderately because of lingering European debt concerns. With the US markets showing noted weakness early in the trading session today, it would appear that the bear camp is set to start the trading session out with an edge. With the Greece debt situation hanging over the market at the same time as the Goldman flap, the markets are really in need of something positive from the US economic report slate. Surprisingly the scheduled economic data flows are generally expected to show positive results today, but we aren’t sure if the trade is even in a position to fully embrace favorable second tier economic data flows. Even more surprising is the fact that the US equity markets discounted or gave very little attention to news yesterday that the US Fed appeared to be reducing its balance sheet risks! However, the market has generally favored the bearish tilt since the April 15th reversal on the charts and the lower close yesterday would seem to give the bear camp an added edge into the US action today. In our opinion, the most that can expected today is for the US data flows to temper the downside bias in stock prices.

S&P 500: With a lower low in the June S&P in the early action today and a series of concerning international themes present, it would appear that the bear camp has the edge today. Initial up trend channel support on the charts is seen at 1188.45 today, but that area won’t hold if the trade sees troubling signs from the European debt situation, or any of the US scheduled readings point to a suspect recovery track. One might suggest that the 1194.20 level in the June S&P will be a quasi bull/bear line today, with a trade below that level capable of propagating more selling pressure.

DOW: While the June Mini Dow has a series of lows around the 11,017 level, we don’t hold out much hope that the market is set to quickly throw off its downward bias and resume the up trend pattern. In addition to a series of comforting scheduled US data points this morning, the bull also needs to see the Greek situation take a turn for the better and that news doesn’t look to be in the headlines this morning. Therefore it is possible that the June Mini Dow is poised for a return to up trend channel support of 10,983 and the failure to hold that level, could signal a more significant corrective slide ahead.

NASDAQ: Up trend channel support in the June Nasdaq isn’t seen until the 2000.70 level, with closer-in support pegged at 2013.00 today. With the market burning through a number of favorable tech sector earnings reports and sentiment unable to remain positive, it would appear that the Nasdaq is in need of further corrective action and that would seem to set the stage for a test of the even number 2000 level. Remember the Nasdaq has recently been “longer” in the COT positioning readings than other segments of the market. The bears have the edge unless the US numbers are definitively better than expected and even then the impact on stock prices might be limited.

TODAY’S MARKET IDEAS: The path of least resistance is pointing downward but anxiety off Goldman and Greece present but not overly intense. This market needs some help from the scheduled US numbers to tone down the existing selling bias.