• Market ripped after Europe close – Massive squeeze in BETA plays (miners, Gold plays, Steels, Coals….Banks big move too) – 3 stories late in PM pushed us higher:

1) Unconfirmed chatter about a Euro area wide bank deposit guarantee scheme endorsed by Merkel (was on TTN)
2) CNBC reported that Italian PM Monti and France’s Hollande considering new measures to boost Euro eco growth (including Euro bonds).

3) Fed’s Kocherlakota said FED has tools to deal w/ EU spillover (He’s always hawkish)

  • SPX had a 1.9% swing from lows (held 1,300) – very good volume after the rally (+3.7% DoD and +2% vs. 10day ave) – Miners a huge move (6% move from lows….look at XME)
  • The market remains range-bound, specifically the S&P 500 trades between 1290 and 1340.  The former being recent support, the latter an important level we broke below.
  • The week so far has been extremely choppy and even bucket 2 timeframe trades have been difficult to manage.
  • Given the cross roads we are at and what’s at stake, trading Bucket 1 (intraday) is just about the only thing that works right here.  There are a multitude of conflicting technical signals out there and while I do think the S&P 500 will at the very least see 1280 (the 200 sma) but more likely 1250 before we call it a bottom, we can bounce around violently here before such time has come.
  • This is just another way of saying what I stated earlier in the week…that I expect more volatile trading here and not specifically just a waterfall lower…although that too has to be factored in.

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