A.M. Update

Good morning,

Overnight and European markets took their cue from the US close yesterday much as they had the day before. For our part, the Index futures had been almost totally flat overnight as seen below,

 NASDAQ Futures overnight

 Until this morning when Greek markets started performing we'll on the same deal rumors out yesterday (close up of ES/SPX futures) this morning.

The red arrow is when Retail sales came out which I would say is hawkish or increases the probability of a rate hike sooner. It seems that has put a lid on the earlier Greek excitement. However be ready for a barrage of rumors, there's not much time left before the ECB is forced to increase the margin on Greek Bank collateral and this isn't even considering whether or not they clench a deal.

 The $USD was stronger overnight as expected which has held oil in check, I suspect it will pressure it a bit to the downside as well.

The big mover was 30 year Treasury futures. I'll be looking at TLT very closely this morning as the cash market opens.

As you know, this move (yesterday) above the 100-day has been expected, it is also expected to fail. Last night we had a strong internals 1-day overbought condition that usually ends with a red close the following day. However we are really interested in when in truly breaks back below the 100-day and with such a sharp "V" base, I don't suspect it will be long, although I do have some doubt it breaks back below before tomorrow's options expiration. Although it doesn't matter what I think, what matters is what the charts show and yesterday they moved quickly to distribution, not hitting the 5 min chart they need to hit, but everything else right up to it so it is very possible we see that today.

I'll of course keep you updated. After that, I expect we'll be moving down toward the October lows , but likely catch another bounce at SPX-200 day m.a. before making it to the October lows with another bounce there before breaking to a new low. These bounces or corrective moves are nothing unusual at all, if anything their strength like yesterday's is indicative of a weak market trend as they act more like counter trend bounces that you see in a bear market (stronger), but we already knew we had just shy of 3 trading weeks of decline from the SPX's head fake / false breakout.