Early Trade

I try not to read to much in to early morning trade, especially on a Monday as many people have set limit orders and such before heading out to work. More simply said, much of the early action is retail which doesn't tell us a whole lot.

 QQQ 1 min positive divergence as of late Friday carried over to the open. As I said late last night, a lot can happen overnight.

 The same is visible in the SPY

As a matter of fact, the divergence was easily seen on RSI as well, which I find to be a useful divergence indicator.

Some of the European debt fears may have had the edge removed by China's vow to help buy debt of insolvent European countries, Hungary was added to their list the last several days. There remain issues regarding the bailout in Germany, where the Constitutional Court will consider a lawsuit contesting the Greek bailout, this could be a major factor in the ongoing Greek drama. Merkel is under considerable pressure as well by the German populace, this was noted several months ago when her party started losing regional elections, the bailout of Greece is hugely unpopular in Germany.

This week will be dominated by Greek news as the vote for the intermediate austerity package is due Wednesday, that's why  said last night, "Stay nimble this week". Moody's has also warned that there is a run on Greek banks causing a severe shortage of bank cash or liquidity.

Other issues in Europe include the rating's agencies putting pressure on Italian banks, Moody's has put Italian Sovereign ratings on a negative watch and Moody's may soon downgrade Italy making debt issuance very difficult and costly.

There are also issues regarding Spanish banks possibly hiding billions in bad real estate debt-similar to the US around 2007-2009.

On the US economic front, this morning both Personal Income and Spending came in lower then consensus.

I'll be updating as market developments occur.