As we look at the markets this morning Mr. Monti is the new PM in Italy, Merkel is issuing all sorts of new urgency on the bailout plans, yet stocks and bonds in Europe are trading lower.

Last week was a serious chop-fest…although stocks traded higher four days out of five, it was Wednesday's trade lower that stuck out like a sore thumb.  All in all we continue to think this environment is best sat out for most traders.  There will however be select high probability trading opportunities arising at the extremes of the current trading range between 1200 and 1300 on teh S&P 500. 

The chart that still best explains the current massive resistance area we are at for stocks is the one below here of the S&P 500.  To trade meaningfully above the resistance line the global economies would all of a sudden have to cure many of its issues…and that in the near-term is basically impossible.

Also look at the SPX on the below chart and note the two trading zones on top of each other.  The current trading range is more or less btween the 200 day moving average on top and the 100 day moving average on the bottom.

The Nasdaq 100 is at a major resistance area which has now been tested four times.  The thing here is that the more a level gets tested the weaker it gets as resistance/support…so from that point of view the tech sector may have higher to trade still.  It is a little hard to imagine..but it is what it is. 

All in all we need to wait for better setups in the broader markets…last week was nothing but chop.

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