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Global equity markets turned lower during the early morning hours as they turned focus to more corporate earnings and the result of a 2-day FOMC meeting. While shares were modestly higher in Japan, the major global indices turned lower in Europe. It seems that lingering Greek debt default fears as well as disappointing quarterly results from Ericsson, which reported a plunge in quarterly demand have undermined sentiment. The German DAX is showing a smaller loss this morning, perhaps helped by German sentiment data that was up for the 3rd month in a row, as that in turn suggests the German economy might be able to stave off a recession. Last night’s State of the Union address from President Obama offered little lasting support to the stock market, but it was seen by some as a campaign speech. US economic data this morning offers up a look into the housing market, with December Pending Home Sales expected to show a slight decline from the November reading. More importantly is today’s verdict of the 2-day FOMC meeting.

S&P 500: The March S&P continues to dance around a short term equilibrium level at the 1311.00 area, with the last four daily settlements falling inside of an extremely tight 1-point range. This coiling-type action suggests that the market is in search of fresh fundamentals for its next direction. Meanwhile, some traders viewed the recent action as “toppy” and did not want to increase risk after the strong start of 2012, especially in front of a FOMC meeting result later in the session. ConocoPhillips was trading higher in early morning action on the hopes that the company can deliver a strong Q4 earnings report. Expectations are for the company to show an 11.5% increase from the year ago quarter. Yesterday’s mid-day weakness breeched swing low support but was able to end on a strong note. Nonetheless, the short term trend for the March S&P looks tired and due for a correction. Uptrend channel support this morning comes in at 1301.50.

DOW: The March E-mini Dow established a higher high during the early morning hours but has since turned into negative territory. It is possible that some of the early lift in the index came from a 1.0% gain in Boeing shares on reports of new business from Norwegian Air Shuttle. Boeing releases their Q4 earnings before the Wall Street open and are expected to show a nearly 10% decline compared to Q4 2010. United Technologies releases their Q4 earnings this morning, which are expected to show earnings growth of nearly 11.0% compared to Q4 2010. While yesterday’s earnings from Dow components McDonalds, J&J and DuPont came in better than expected, they failed to inspire fresh enthusiasm to the upside. This could be a sign of a market that has become tired and overbought. The intermediate term price trend in the March E-mini Dow points up, with support at 12,553. Confirmation of a move below 12,486 could put the bear camp on top.

NASDAQ: The March NASDAQ registered a new contract high overnight helped by Apple earnings. The company posted record sales and profits on the quarter that were supported by very strong holiday demand for its iPhone and iPad. Shares of Apple were up nearly 7.0% in German trading this morning, and that is a force that should limit weakness in the index this morning. Meanwhile, Yahoo’s Q4 revenues and sales fell short of estimates amid weak advertising demand. There was also a pair of warnings from AMD and Altera Corp yesterday that pointed to weaker tech-related sales prospects ahead. The bulls have the advantage this morning and remain in a short term uptrend pattern. Key swing low support for the March NASDAQ stands at 2419.50.

TODAY’S MARKET IDEAS: The major US indices start on a softer note this morning, with the exception of the NASDAQ which is benefiting from new record high prices in Apple. However, recent low trading volumes, growing level of complacency and overbought technicals suggest that the US indices could be ripe for a correction. There also appears to be change in sector leadership, with recent gainers failing to participate on rallies. Some technicians suggest that the current wave pattern in the S&P 500 is nearing the conclusion of its b-wave rally (off the October low), which suggests that next primary leg in the index is down, potentially targeting the 1050.00 area in the March S&P 500. We would like to see a bit more confirmation of a turn before getting short. Aggressive bears might consider buying out-of-the money puts on strength.

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Global equity markets were facing a number of negative headwinds overnight, including an S&P ratings downgrade of 15 banks, some disappointment with the Euro rescue fund efforts and further signs that China might be slowing. After yesterday’s close, S&P lowered their ratings for 15 major global banks by one notch, and that pressured global equity markets in the overnight action. Asian equity markets were considerably lower, led by weakness in the Chinese Shanghai Composite. While there is evidence that export growth to Europe has slowed, this morning’s unexpected move by China’s Central Bank to cut bank reserve requirement ratios has helped to turn the early tone positive. Meanwhile, global equity markets maybe holding up better than might be expected given general disappointment over the latest Euro zone rescue fund developments. Some analysts indicate that the size of the fund has fallen short of the 1-trillion mark, forcing EU ministers to pursue other more creative funding options, like the IMF. Perhaps the trade is hopeful that the EU will eventually do what is necessary and perhaps the trade is simply anticipating favorable private US payroll data this morning, which is expected to show gains to levels not seen since April. The markets also appear to be anticipating a positive read on Chicago ISM and pending home sales figures.

S&P 500: Overnight and early morning action in the December S&P 500 has formed a bullish outside day reversal that reflects a positive shift in sentiment. While the index came under overnight pressure following the S&P ratings downgrade of 15 major global banks, action taken by the PBOC this morning to ease monetary policy has helped to shift the tide in favor of the bulls. Meanwhile, the December S&P 500 showed a level of vulnerability yesterday, held back by underperformance in the financial sector. Shares of Tiffany & Co were down nearly 9.0% yesterday, following weaker than expected earnings and holiday sales warnings. The December S&P 500 is on a bullish track this morning after taking out yesterday’s high (1203.00), which leaves the next level of resistance at last week’s gap of 1209.00 to 1214.00.

DOW: The December E-mini Dow had a gap lower opening Tuesday evening in the wake of a surprise banking sector downgrade from S&P. While this might help explain the relative underperformance of the banking sector during yesterday’s trade, it did pressure shares of Bank of America below $5.00 in after-hours trade. Yesterday’s bankruptcy filing of AMR has the potential to provide an added drag on the shares of Boeing today, and also that could put recent Airbus sales in jeopardy. The short term trend in the December E-mini Dow offers the bull camp the advantage, with 11,615 as resistance. Near term support for the index comes in at 11,436.

NASDAQ: December NASDAQ reversed overnight losses this morning in the wake of China’s Central bank decision to reduce reserve requirement ratios. While this should inject a level of optimism into tech-related shares this morning, there are also positive headlines involving Yahoo. Reports that a private-equity group has offered $16.70 for a minority stake in Yahoo should provide an added lift. That offer is a little more than 6.0% above Tuesday’s settlement price. The bull camp gets the early nod, with resistance at 2245.00, then at the November 21st gap up to 2249.75.

TODAY’S MARKET IDEAS: With the month of November drawing to a close, there is the potential for end-of-month volatility today. Some traders note signs of institutional buying in the futures market, and that is a force that could gain more traction toady and in coming week’s as funds wind down for the year. In the meantime, US equity markets face growing negativity surrounding the European debt crisis (slow on specifics) and slow-growth concerns in India and China. These negative forces have been put at bay to start this morning’s, but they present headwinds to any meaningful upside attempt. This morning’s flow of US economic data is expected to come in positive, and disappointment there could leave the bull drive vulnerable. Given the prevailing intermediate down trending patterns in the December E-mini Dow and S&P 500, we continue to view rallies as selling opportunities.

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Global equity markets are on a higher track this morning supported by more optimism surrounding European debt crisis talks and positive economic data out of Asia. It seems the one item agreed on at this weekend’s EU summit was that the ECB would not backstop EFSF funds. The market still wants to believe that European officials are closer to a deal on bank recapitalization and how to leverage EFSF funds. Flash Purchasing Managers’ data out of China broke a 3-month streak of contraction, and that was seen as a positive that helped to rally base metals and resource related shares early this morning. It also helped the Chinese Shanghai Composite Index broke a 4-day losing streak. Favorable export readings out of Japan, on a boost in demand for automotive parts, also lent a positive early morning tone. Meanwhile, interest rate markets in Europe showed a different reaction to yesterday’s EU summit, with German Bunds reversing early morning losses and rallying to new highs on the session. Perhaps some of that early morning reversal came from disappointing PMI data out of Europe. There was also talk from a major Wall Street firm indicating that the US faced another credit downgrade by year’s end. This morning’s US economic calendar presents the latest read on Chicago Manufacturing, which is expected to show only a fractional gain on the month.

S&P 500: The December S&P 500 is on a higher track this morning as it extends last week’s bullish chart breakout to the upside. It seems that the combination of well-received meetings in Brussels over the weekend, along with friendly economic data out China overnight have given the bulls some early morning firepower. However, anxiety is building ahead of a final decision on the European debt situation on Wednesday. This heightened anxiety is highlighted by an index of Greek bank stocks, which plunged by 15% during the early morning hours, fearing a deeper markdown Greek government bonds held in the private sector (haircuts are now ranging from 40 to 50%).With a little more than 20% of the S&P 500 companies reporting earnings, nearly three-fourths have beaten street estimates. Texas instruments reports their quarterly earnings after the bell today, with EPS expected to show about a 20.0% decline from the year ago quarter. The trade is expected to keep a close eye on the earnings for a read on chip demand ahead of the holiday season. The Commitments of Traders Futures and Options report as of October 18th for S&P 500 stock index showed non-commercial traders were net long 5,749 contracts, an increase of 7,523, which represents a change from a net short to net long position. Non-commercial and non-reportable traders combined held a net short position of 11,737 contracts, a decrease of 6,037 on the week. The bull camp holds the cards to start this morning, looking for more bullish confirmation to extend gains out of the past 2.5 months trading range.

DOW: The December E-mini Dow extended Friday’s gains during the initial morning hours and have reached their highest level since August 2nd. The positive action has helped confirm a technical breakout on the charts above the 2.5 month trading range, which would normally give the all clear for a sustained rally higher. However, the reluctance of a number of momentum indicators to confirm the breakout, Euro zone uncertainty and average trading volumes detract from the bullishness. Caterpillar reports earnings before the Wall Street open and is expected to show a 26% gain in EPS compared to the year ago quarter. Probably even more important will be the company’s forward outlook in the face of growing economic headwinds. Meanwhile, the Commitments of Traders Futures and Options report as of October 18th for Dow Jones Index $5 showed non-commercial traders were net long 8,739 contracts, a decrease of 3,476. Non-commercial and non-reportable traders combined held a net long position of 6,681 contracts, a decrease of 1,200 on the week. It is possible that the speculative selling trend during last week’s congestion was probably the result of profit-taking from the October rally. The early edge goes to the bull camp this morning, with potential upside targeting coming in at 12,097 based on the recent congestion pattern.

NASDAQ: The December NASDAQ established a higher high during the early morning hours and sits just 38 points below last week’s high. In addition to optimism surrounding the EU Summit over the weekend, the NASDAQ could be benefiting from news that Google has been out looking for financial backing for a potential bid for Yahoo. The Commitments of Traders Futures and Options report as of October 18th for Nasdaq Mini showed non-commercial traders were net long 37,971 contracts, an increase of 24,457. Non-commercial and non-reportable traders combined held a net long position of 11,749 contracts, which reflects a shift from a net short to a net long position. While the buying trend of the speculators is seen as a positive force, those figures could be overstated, as the NASDAQ slipped nearly 30 points after the report was conducted. The bulls have the early advantage this morning, with key resistance at 2388.50.

TODAY’S MARKET IDEAS: The December E-mini Dow and S&P 500 have confirmed a close above the recent 2.5 month trading range, which on the surface is bullish. It is a step closer in leaving the October low as an intermediate bottom. However, there still remain a number of unresolved issues overhanging the market: US Economic growth prospects and concrete steps to resolve the European debt crisis. For now, both factors have seen some positive press, but more is needed to justify the higher price levels. Sentiment is beginning to flash bearish warning signals, like a put to call ratio that is reflecting excessive bullish optimism. A key theme to watch in today’s trade is for a noted pick up in fund buying interest now that the major indices have broken out of their respective trading ranges. Volume was average Friday, but for a significant push out of the range probably needs to see greater participation. We maintain a positive short-term bias, but remain suspect over another leg higher at this juncture.

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Progress on the Euro zone debt crisis took two-steps backwards over the weekend, and that has heightened the fear element in the market and pressed global equities lower. While there were modest gains in the Japanese Nikkei following Friday’s rally on Wall Street, European shares came under heavy selling pressure Monday morning. The combination of German Chancellor Angela Merkel losing a regional election over the weekend and minimal progress among EU leaders at a 2-day meeting in Poland has compromised sentiment. It also appears that global financial markets were dealt another blow to confidence with Greece’s Prime Minister canceling his visit to the US. Some viewed the cancelled meeting as a sign that the debt crisis might be worse than expected. Meanwhile, the bottom line is that the European debt situation has not improved and there are still no concrete plans to deal with the crisis. Two catalysts this week worthy of shifting sentiment, include a meeting among BRIC leaders later this week to discuss euro zone support and a 2-day FOMC meeting that could result in new stimulus measures to bolster the struggling US economy. President Obama is expected to introduce his new deficit reduction plan today to help finance his new jobs bill. The package is expected to go to the Super-Committee, but so far new tax proposals on the wealthy, inspired by Warren Buffett have been met with mixed emotions.

S&P 500: The December S&P 500 starts in the red this morning as it appears to be ending last week’s five-day winning streak. The December S&P 500 rallied slightly more than 8.0% from last week’s low to Friday’s close to challenge the August 31st high. We think it takes something rather significant to power beyond the August 31st high of 1223.00. European bank shares came under heavy selling pressure this morning, led by SocGen and UBS. UBS indicated that they have covered all of the positions highlighted in the unauthorized trading losses, but they seem to have come with a larger price tag approaching $2.3 billion. Commodity related shares are under pressure this morning, seemingly in response to a lack of progress in Europe over the weekend that triggered concerns of slowing commodity demand. The Commitments of Traders Futures and Options report as of September 13th for S&P 500 showed non-commercial traders were net short 51,648 contracts, an increase of 2,702. The commercial traders were net long 69,419 contracts, an increase of 11,168. Non-commercial and non-reportable traders combined held a net short position of 69,417 contracts, an increase of 11,165 contracts in their positioning. This is just 1,000 contracts less than the fall 2007 extreme and could be nearing extremely oversold territory. Meanwhile, the 4.0% rally in the S&P 500 since the report window closed, could be the result of squeezing those new shorts out of the market. For this morning, the December S&P 500 has support below at 1182.50.

DOW: The December E-mini Dow had a gap lower open Sunday evening and has slipped back to the 11,250 area. Dow stocks received a lift last week on reports that United Technologies was tapping into the credit markets for as much is $20 billion. There also appears to be chatter that United Technologies may be considering the acquisition of aircraft supplier, Goodrich, which some viewed as a positive. However, fears of a spreading European debt contagion and lack of control by European officials has drastically shifted sentiment this morning in favor of the bear camp. The Commitments of Traders Futures and Options report as of September 13th for Dow Jones Index $5 showed non-commercial traders were net long 11,244 contracts, a decrease of 344. The Commercial traders were net short 9,783 contracts, an increase of 1,099. Non-commercial and non-reportable traders combined held a net long position of 9,783 contracts. This represents an increase of 1,099 in the net long position held by these traders. The technical action in the December E-mini Dow favors the bear camp, with near-term targeting below at 11,250. There is gap resistance above the market at 11,351 to 11,444.

NASDAQ: The December NASDAQ has taken a negative turn below Friday’s low this morning and is down nearly 2% from Friday’s high. This comes in the wake of last week’s five-day trough to peak rally of 9.0%. While most of the early morning action has been driven by a risk-off attitude stemming from the euro zone debt crisis, there is a chance that shares of Netflix could recover from last week’s 26.3% slide. Netflix is expected to split its business into two units, separating streaming movies from the DVD mail service. The Commitments of Traders Futures and Options report as of September 13th for NASDAQ Mini showed non-commercial traders were net long 9,927 contracts, an increase of 456. Non-commercial and non-reportable traders combined held a net long position of 34,441 contracts, an increase of 950 on the week. The bears have the early edge in the December NASDAQ, with support below at 2248.50 and then at 2239.25.

TODAY’S MARKET IDEAS: US equity markets begin the new week under pressure, largely in response to fresh Euro zone debt concerns and risk of the contagion spreading across the global market place. There is an apparent safety bid present in debt markets, and after last week’s gains pushed markets into short term overbought territory, suggests that more near term downside is possible. The December S&P 500 has a support shelf below at 1182.50, and if violated has the potential for a slide targeting 1155.00 level. The December S&P 500 has resistance above at the August 31-September 1 high trade from 1204.00 to 1219.00. This corresponds to 11,591-11,474 in the December E-mini Dow. We remain suspect that US indices can continue their march higher without a fresh positive news development.

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One of the worst US economic fears came to fruition over the weekend when S&P Ratings lowered their credit rating on US debt from AAA to AA+. While this is the first time that such a rating downgrade has happened, there remains a great deal of demand for US Treasuries in a world of few alternatives that have the liquidity and safety. Global equity markets reacted negatively to the downgrade as well as to fears of a global economic slowdown. These fears were highlighted in the gold market, which surged to new contract highs above $1700.00 ounce. Asian equity markets took the brunt of the selling, with the China Shanghai index losing more than 4.0% and the Japanese Nikkei closing down by more than 2.0%. European equity markets fared slightly better in the early morning hours, as they drafted a level of support from the European Central Bank’s decision to purchase Spanish and Italian government debt. This has helped contain fear premiums in the region and relieved pressure on related sovereign debt spreads. Additionally, an emergency meeting among G-7 financial leaders affirmed their stance to provide stability and liquidity in the financial markets, and that may have helped to offset some of the initial negativity. At the very least, it shows that financial leaders are willing to take further action if needed. A lack of fresh economic data points in the US this morning is expected to keep the market focused on slowdown fears and the S&P downgrade. Still, the knock-on effects of the S&P downgrade are unknown and may take some time materialize.

S&P 500: The September S&P 500 established a new low for the decline overnight and has challenged the lower end of the November consolidation zone (1156.10). The outside market tone has grown more uncertain over the weekend, with the latest rating downgrade to US debt, and the full impact of that downgrade has not been fully priced into the market just yet. Meanwhile, a number of European bank stocks benefited from the ECB’s purchase of Italian and Spanish bonds overnight, but the impact that might have on US bank shares is unknown. The Commitments of Traders Futures and Options report as of August 2nd for S&P 500 Stock Index showed non-commercial traders were net short 16,379 contracts, an increase of 18,139. This represents a change from a net long to net short position. The Commercial traders were net short 36,897 contracts, a decrease of 12,249. Non-commercial and non-reportable traders combined held a net long position of 36,897 contracts, a decrease of 12,249 in their net long positioning. Again, these figures could be understated after the index fell another 6.5% since the report was conducted. This also suggests that the S&P 500 may have more downside to go to turn the net spec positioning to a short status. Some traders point to the 1150.00 level as the next downside stopping point for the S&P 500. Meanwhile, the weak economic backdrop continues to foster a sell on strength mentality.

DOW: The September E-mini Dow had a gap lower open Sunday evening and fell to new low for the decline. The S&P Ratings downgrade has weighed heavy on mining and industrial stocks in overnight action as they brace for the negative impact on global growth prospects. Slowing global growth concerns pressured crude oil prices lower overnight, and that is a factor likely to weigh on energy-related components within the index. The Commitments of Traders Futures and Options report as of August 2nd for Dow Jones Index $5 showed non-commercial traders were net long 18,704 contracts, a decrease of 7,013. The Commercial traders were net short 22,513 contracts, a decrease of 9,506. Non-commercial and non-reportable traders combined held a net long position of 22,513 contracts, a decrease of 9,505 on the week. It is possible that theses figures are understated after the E-mini Dow tumbled more than 700 points since the report window closed. The early morning tone continues to favor the bear camp, with Fibonacci support coming in at 11,190 and 10,792. Near term resistance comes in at 11,590.

NASDAQ: The September NASDAQ extended last week’s weakness during the initial morning hours and fell to levels not seen since November 30, 2010. Tech related shares have come under a great deal of pressure in recent sessions as they try to adjust to slower growth. These shares have also come under pressure from an aggressive liquidation trade as uncertainty within the market grows. Some of that liquidation was highlighted in the latest Commitments of Traders Futures and Options report as of August 2nd for the Mini NASDAQ. Non-commercial traders were net long 61,273 contracts, a decrease of 17,270. The Commercial traders were net short 67,934 contracts, a decrease of 19,083 contracts. Non-commercial and non-reportable traders combined held a net long position of 67,935 contracts, down 19,081 on the week. The report coincided with a reading on the September NASDAQ of 2288.25, and prices have fallen by more than 150 points since, which suggests a greater level of long liquidation selling. The September NASDAQ has a level of support below the market from the November 2011 lows at 2084.25.

TODAY’S MARKET IDEAS: Economic slow down fears, along with debt concerns in both Europe and US have not gone away, and that keeps a big negative hanging over equity markets this morning. Volatility and uncertainty is expected to remain elevated, and that is expected to keep trading conditions difficult. The trends in both the September E-mini Dow and S&P 500 remain in favor of the bear camp, with downside support coming in at 10,915 and 1150.00. Near term resistance on the September E-mini Dow comes in at 11,590 and 1223.50 for the September S&P 500.

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Heightened risk aversion keeps global equity markets on edge, especially after warnings of a downgrade to US credit ratings if a debt ceiling deal is not reached. Moody’s came out late Wednesday and warned of the growing threat that a US Debt deal would not be reached by the August 2nd deadline, leading to a US default on its obligations. This weighed on global equity markets overnight and detracted from the optimism created by QE3 prospects, expressed by Fed Chairman Bernanke during Wednesday’s testimony. Fed Chairman Bernanke goes in front of the Senate this morning and is expected to acknowledge a persistently weak US economy and potential for more stimulus. It probably takes something more than yesterday’s comments to manufacture another rally today. While that news was well received yesterday, equities are also more keyed in on US deficit reduction talks that are expected to continue today. Equity markets are concerned by a number of big picture items, including the European debt crisis, US debt ceiling debate and the start of second-quarter earnings season. That uncertainty has fostered flight to safety movement into precious metals. Some of that uncertainty surrounding Q2 earnings will be answered today with results from JP Morgan early this morning and Google this afternoon.

S&P 500: The September S&P 500 established a lower low overnight in the wake of Moody’s US credit downgrade warning but has since returned back toward unchanged levels. It is possible that the index garnered a level of support from positive action in the shares of YUM Brands after the company reported earnings and raised their full-year outlook. In addition to an active economic calendar this morning, with expectations for a slight decline in initial jobless claims and fractional increase in June PPI, the market will be watching earnings from JP Morgan this morning. Analysts are expected to pay closer attention to the company’s future business prospects rather than actual earnings. Wednesday evening’s breakdown leaves the bear camp with the advantage this morning. Resistance above comes in at 1315.00 and 1320.50. Key support below stands at 1305.00 and the 1290.00 area.

DOW: The September E-mini Dow extended Wednesday’s late session slide but has since turned back into positive territory. Ideas that another round of stimulus could be in the cards for the US economy, if conditions warrant, helped lift the Dow to session highs yesterday. The Dow Jones Index also garnered support from sizeable gains in the energy sector, which benefited from a rally across the energy complex. Weakness in the September E-mini Dow this week has been contained by retracement support of 12,370, which leaves it a key downside level today. The short term trend favors the bears, with resistance above at 12,490 and 12,625.

NASDAQ: The September NASDAQ established a new 8 session low overnight, but has since reversed into positive territory. Tech-related shares got a big boost in Wednesday’s session on an improvement in risk appetites and prospects for QE3. That positive tone has since been watered down by a potential downgrade to US credit ratings. Google reports their quarterly results after the close today and is expected to show fractional improvement from last year. The trade will likely keep a close watch on the company’s efforts within the social networking space. Shares of Amazon could get a boost in today’s trade after they announced plans to introduce a new tablet computer in October. Early morning trade in the NASDAQ has been choppy, and leaves the bear camp with a slight edge after this week’s slide. Resistance comes in at 2365.50, with 100 day moving average support below at 2314.00.

TODAY’S MARKET IDEAS: A threat to the US credit rating, breakdown in US debt ceiling talks and the prospect for another round of quantitative easing have kept the market volatile. This morning’s economic calendar could put slow down fears front and center if the 7:30 AM CT numbers disappoint. There is also the threat that the European debt situation comes back into focus ahead of weekend meetings and as the market grows impatient waiting for a solution. The market will also receive some big earnings results in the session that are also worthy of attention. The intermediate term trends in the September E-mini Dow and S&P 500 favor the bears to start.

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Global equity markets are once again on a lower track this morning as they continue to grapple with the Greek debt situation and quadruple-witching option expiration. The Greek debt problem continues to saddle risk appetites, which was highlighted by a plunge in crude oil prices to their lowest levels since late January overnight. The growing unease helped to pressure China’s Shanghai composite index to its lowest level since October. There was talk overnight of a potential hike in Chinese interest rates again over the weekend, and that could be another factor working against the bulls this morning. The Japanese Nikkei was also lower and fell to its lowest levels since March 29th. Not only is the Greek debt crisis worrying overseas investors, there remains concerns over a resolution to the US debt ceiling debate. European shares were lower at the same time their volatility index reached a new 3-month high, which reflects an ongoing level of fear and diminished buying interest. While there seemed to be a minor lift in US indices following Thursday’s favorable Initial Jobless Claims data and a surprise jump in Building Permits, the ongoing Greek debt situation continues to undermine market sentiment. This morning’s US economic calendar will show the latest on June Consumer Sentiment and June Leading Economic Indicators

S&P 500: The September S&P 500 traded lower during the initial morning hours, but it has since reversed course and registered a higher high on the session. Perhaps some of the added lift this morning comes from fresh merger news, with Capital One planning to buy ING’s US retail banking unit for $9 billion in cash and stock. Meanwhile, the CBOE Volatility index was up by more than 6.0% yesterday and reached its highest level since March 16th, and that action suggests there is still a high level of fear in the market over a potential Greek debt default. Banks stocks remain under pressure on concerns that a potential Greek debt default could lead to greater write-offs that may have them in search of added capital to boost balance sheets. While it is possible for an extended corrective rally this morning, the short term trend favors the bear camp.

DOW: The September E-mini Dow made a higher high overnight as it attempts to build on Thursday’s late day gains. Banks stocks within the index continue to struggle with their exposure levels to Greek debt, and that remains a drag on the Index. Bank of America made the news wires late Thursday evening after its CIO did not know the extent of damaging documents compromised through recent Wikileaks. Overnight weakness in the crude oil market could also be a factor that pressures energy related shares within the Dow. In the meantime, the September E-mini Dow has turned the tide during the early morning hours in favor of the bulls, with a move above downtrend channel resistance of 11,940. Next upside resistance comes in at this week’s high of 12,050.

NASDAQ: The September NASDAQ began the overnight trade on a weaker track and stood about 8% below the early June high. Some of that weakness comes from disappointing quarterly results from Research in Motion late Thursday, which showed first quarter profits down by more than 9.0% compared to year ago levels. The company also lowered forward guidance and announced upcoming layoffs, which pressured its shares lower by over 14% in the overnight action. The tech sector may also get some play from a multi-billion dollar lawsuit, as Oracle goes after Google over patent infringements, and that casts another negative for tech related shares this morning. The September NASDAQ remains in a downtrend pattern, with support this morning coming in at 2175.00. It probably takes a rally back above 2213.00 to begin to turn the charts in favor of the bulls.

TODAY’S MARKET IDEAS: Today’s session represents quadruple-witching option expiration that is likely to bring about added volatility, especially after an 8.4% break in the S&P 500 off of the May high.  Resistance in the September E-mini Dow comes in at 12,000, with a swing high above at 12,050.

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The stock market has tried to throw off the slowing mentality this week but the flow of weak data has been fairly consistent. The market seems to be of a mind, that last month’s bulge in energy prices wounded the US consumer and that the numbers this morning will reflect the headwinds facing the recovery. With the markets also seeing fresh legal action against a major US investment bank, slack retail sales views, uncertainty off the US budget situation and residual fears off the Greek debt problems, there seems to be at least 3 or 4 bearish themes populating the headline flow. Therefore investors could take a large measure of direction from the payroll readings this morning, as there has to be some hope of growth and momentum, to decide to weather the risk presented in the current marketplace. With Moody’s yesterday indicating that they might cut ratings on a number of US Banks and the markets coming away from this week’s trade with fresh concerns for the US housing sector, the market might need to see a patently weak payroll reading and a sharp range down move on the charts to fully adjust stock prices for the new slower reality.

S&P 500: While the June S&P has managed to hold above the Thursday low in the early Friday morning US action, the technical picture from the charts doesn’t look that encouraging. Some traders see a developing pattern of lower highs and lower lows and given the flow of macro economic and political news this week, that pattern seems to be justified from a fundamental perspective. Some traders aren’t ready to call for a key low in the S&P until there is an exhaustion failure on the charts, with a reversal within the same session. In fact, the odds of a temporary test of the sub 1300 level looks possible today in the aftermath of the payroll release.

DOW: While the June Mini Dow initially managed to respect the prior session’s low in the early Friday trade, a recent pattern of lower lows has settled onto the charts. With a ratings threat against some US banks, the trade accepting of slowing activity and recent damage on the charts, the bear camp would seem to hold most of the cards to start the last trading day of the week. Big cap stocks might also be somewhat undermined by ideas that China might be poised to raise interest rates again. Down trend channel support in the June Mini Dow is seen at 12,169 today, with that level falling down to 12,161 on Monday.

NASDAQ: With an initial slide in the early action today, the bear camp this morning probably feels like it has the technical picture working in its favor this morning. With Walmart apparently seeing the need to revise its strategy to win back customers and the market recently presented with some poor retailing numbers this week, it is clear that investors are accepting of the idea that high energy prices have indeed dampened activity in the US economy. Therefore the non farm payroll readings this morning might take on a significant role in the market today, especially given the initial attempt to push the NASDAQ down overnight. Some traders see a critical pivot point at 2317.00 this morning but to turn the tide back in favor of the bull camp might require a rise back above 2327.00.

TODAY’S MARKET IDEAS: The fundamental and technical tracks look to remain down with the market seeking fair valuation. With growth suspect and the end of easing anticipated at the end of the month, it could take some dovish commentary from key Fed officials to actually shut off the downward track in equity prices. In fact, when one adds in the budget mess in Washington and the tightening bias from China, a number of roads seem to lead to even lower equity prices ahead.

This content originated from - The Hightower Report.

Below is a sample of The Hightower Report’s Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!

Global equity markets are on the defensive once again during the initial morning hours as yesterday’s commodity liquidation trade continued. Asian shares were lower across the board, fueled in part by concerns over China’s next step with monetary policy and whether the country’s growth story may falter. Weakness in commodity markets, like copper reaching its lowest level since December and silver’s 14.1% slide from Tuesday’s highs have pressured mining related shares in European trade again this morning. Adding to the weak tone was disappointing European Industrial Production data that showed a decline in March compared to expectations for a modest gain. There also remained concerns over Greek debt restructuring as well as fresh warnings from the IMF that urged the ECB to hold off on hiking interest rates and calling for more reform to limit the debt crisis from spreading. Some analysts said that weakness across most asset classes left no place to hide and prompted many to cut risky positions, which has further contributed to the liquidation trade.

S&P 500: The June S&P continued to decline from Wednesday’s negative reversal and ongoing liquidation trade during the early morning hours. This puts the index closer to the May 5th low of 1325.50 and makes that level a likely downside testing area this morning. In addition to broad weakness in commodity related names, financial sector shares were also under pressure. While there was news regarding AIG’s debt offering of around $9 billion, it was nearly half previous estimates and makes it more difficult for the Treasury to exit their position (bailout funds) with a profit. The bears have the edge to start this morning with the key downside pivot level of 1325.50. Clear penetration below this level would bring the 1300.00 area back into focus.

DOW: The June E-mini Dow fell to a new 5 session low this morning and has closed in on last week’s low of 12,467 in the process. In addition to weakness in energy and industrial related names, the Dow came under more downside pressure following disappointing guidance from Cisco Wednesday afternoon. Cisco reported an 18% drop in third quarter profits and lowered its sales and growth prospects below street expectations going forward, and that seemed to add to the prevailing bearish tone. Wednesday’s bearish wide range reversal and downside follow through this morning provide the bear camp with the early advantage. The June E-mini Dow has support below at last week’s low of 12,467, which corresponds with a 50% retracement level from the late April rally at 12,454.

NASDAQ: The June NASDAQ has fallen within 10 points of its May lows of 2363.50 during the early morning hours. While news that Intel planned to hike their quarterly dividend by 16% may have normally been viewed as a positive, worries over economic growth and sustainability of recent gains in the NASDAQ inspired profit-taking. Perhaps economic data this morning on April Retail Sales provides NASDAQ shares with something positive, but for now sentiment favors the bears. Downside resistance in the June NASDAQ lies at 2363.50.

TODAY’S MARKET IDEAS: US equity markets face a weak outside tone driven by an ongoing liquidation trade in risk assets. The major US indexes are approaching a key support level provided by last week’s low and further penetration below that level could set the stage for an even deeper slide. At the same time, it probably takes a disappointing sweep in this morning’s US economic data on April Retail Sales, Producer Prices and weekly Jobless Claims to fuel a decline worthy of more downside momentum. There were reports that China hiked their bank reserve requirement ratio, which could be another negative blow to the commodity trade that manifests itself in weaker related shares this morning. Key pivot levels below in the June S&P 500 come in at 1325.50 and 12,467 in the June E-mini Dow.

This content originated from - The Hightower Report.

Below is a sample of The Hightower Report’s Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!

The final trading day of April presents rather flat equity markets, with a low volume trade as markets in Japan were closed for the May Day holiday and London markets closed for the royal wedding. European shares were under modest pressure after a 6 day winning streak that has likely fostered a round of profit taking. While many companies in the country in the Euro area have posted better than expected earnings, there is some concern after others lowered their future outlooks, which suggests a more challenging environment to come. This view was also highlighted by this morning’s economic data that showed Euro zone inflation coming in above target levels and sentiment falling below estimates. Retail sales data in Germany showed an unexpected decline, indicating that consumers there are beginning to feel the effects of higher inflation. Meanwhile, world equity markets key in on a plunging US dollar that weakened further after US GDP data showed slower than expected 1st quarter growth. While sentiment for the greenback has turned decisively negative, there is a sense that the US will maintain accommodative policy for the foreseeable future, and that continues to foster movement of funds into alternative assets. This morning’s flow of US economic data will present a couple of sentiment metrics, including the Chicago Purchasing Manager’s report and April Consumer Sentiment. Equities will also get the latest results this morning from Caterpillar, Chevron and Merck.

S&P 500: The June S&P 500 has experienced an upside breakout from recent congestion that has gone on to register new contract highs. Some technicians note that the breakout has come on a 72,000 contract jump in open interest during the first 3-days of this week, which is viewed as supportive. The upside gains have been supported by better than expected earnings and upwardly revised forward outlooks. Overnight earnings from French energy giant Total showed a surge in quarterly profits that topped estimates, and that coupled with their bid for US Sun Power could be a factor that supports energy shares this morning. Meanwhile, there appears to be some concerns that the June S&P 500 has become short-term overbought during the push higher and maybe in need of a short term pullback. There is short term support below at 1347.00.

DOW: The June E-mini Dow spent most of the overnight and early morning trade around unchanged levels after making new contract highs late Thursday. Shares of the Dow Transports closed at a new all time record high and were helped by solid gains in rail stocks. Perhaps the lack of upside follow through comes ahead of this morning’s earnings results from Caterpillar. While the company is expected to report a surge in 1st quarter profits, the market could be looking for even better results and an optimistic earnings outlook. Additionally, Chevron and Merck are expected to release their latest results before the Wall Street opening, and that could be a force that dictates the early tone. The June E-mini Dow has closed higher during 6 of the last 7 sessions and prices are up over 5.5% since last week’s low, and that might indicate a market vulnerable for a near term set back. The short term trend continues to favor the bull camp, with key support below at 12,609.

NASDAQ: Shares of the NASDAQ 100 have been on a tear of late, with a 7.3% rally in the June NASDAQ from last week’s low to yesterday’s high. Despite the upside surge into new contract highs, prices showed some negative reversal action late in the session Thursday. While Microsoft beat consensus earnings estimates, sales of their key Windows product declined. The soft sales exerted downside pressure on its shares overnight. It is also possible that a surprise cut to Research in Motion’s 1st quarter outlook, on fewer BlackBerry shipments, could provide a minor negative headwind for the NASDAQ this morning. The chart action in the June NASDAQ has unfolded in a three wave advance from the March 17th low, and that provides the chance for more upside targeting 2422.50. Key swing support below stands at 2387.25.

TODAY’S MARKET IDEAS: US equity markets have embraced better than expected quarterly results, which have powered the major indexes to new contract highs. The market is clearly embracing the positives and managed to shrug off disappointing GDP data and Initial Jobless Claims Thursday. While some say that data is history and that the market is looking forward, it does raises questions to how profitability might be going forward. Views that the Fed will continue to support easy monetary policy, as well as expectations for ongoing active inflows coming into US equity markets would seem to suggest that the bulls have the wind at their backs. While it is possible for a near term setback after recent gains, the overall trend continues to support the bull case.

This content originated from - The Hightower Report.