• SPX traded lower all afternoon and closed just off lows. 1300 never tested. Volumes remained muted, down 10% v 10d avg at just over 6bln shrs. 9/10 super sectors lower with Energy, Mats, Cons Disc all down over 100bp (Telcos +7bp). Signs of shorting in Energy in particular.
  • Moody’s downgrades, Spanish bailout details, and the upcoming Greek election all remain overhangs for volume and risk.
  • Financial strength faded. However, JPM +2% after Jamie Dimon testified before the senate this am.  Regionals were led by STI +1% (had been hit on PNC weakness). However, PGR -4% as claims costs exceed targets (BN). Credit card stocks also lower.
  • Additionally, implied correlation (ICJ index) made a new cycle peak.  Note the chart below.  What it implies is that correlation expectations among S&P 500 stocks going forward are on the rise.  This also plays into my theme to avoid single name stocks for the time  being and just trade the indices, if you must trade anything at all.

  • Stocks remain in an entirely directionless trend here from a bucket 2 swing trade point of view and I see no edge here.  I remain in cash.
  • For the rest of the week note that we have quadruple witching options expiration tomorrow and of course the looming Greek elections over the weekend.
  • For my part I expect an entirely random day on Friday due to the above two events and as such will take the day off and re-charge the batteries to play again on Monday


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