Ahead of the open, (18-11)

What ails Eurozone and hopes of Germany or ECB giving in and fixing it faltered pre-market as followed up here pre-market morning update: a) Spanish/ French yields coinciding with Merkel’s comments. “ECB can’t solve..”  Add, fresh USD funding stresses..see ZH note at 1:30pm…Global dollar liquidity freeze  ( noted here coming into the trading day) and the ‘soup’ boiled over at Europe’s close as market participants began to doubt the hope of ECB intervention/ defending and markets slid fast through this week’s low and Greece’s referendum low from prior week.  IF market truly believed in a ‘wildcard’ in form of some QE coming, Euro’ would be down not up and Gold would be up, not down.  Contradiction in what was talked about as far as QE in some form by talking heads/ newspapers this morning (international political/countries pressure ie. Wise’ man noted recently here on ECB) and what underlying market (Euro/Gold) was actually doing was clearly evident.

As pointed out proximity to~1236SP pushed sellers in and left new buyers side-lined by Wednesday’s close .. “..with another unpredictable ‘ overnight’ in Europe ahead”.  While market digested morning news, traders still had a few hours to get out at ~1236 before a break of SP1220. ..”Here, still looking at 1230 to 1220 as last support before drop below 1200”.  In all, intervention may occur by year end, but with buyers on strike, it’s begun to feel this week like dip buying at lower range of wedge 1220-1230 may be exhausted this month until fresh lows are hit.  The consensus view gathering steam of a year- end rally while market consolidated October’s historic in November, dissipated in the morning.  Despite solid eco’ data so far in November, the markets underlying faults have been cited for days here leading to rejection at SP 1275:

Financials underperforming, down >2 >4 and by Wednesday 6% month to date., Growth, higher beta stocks not participating, RUT underperforming for days. Also, since CSCO’s first major Oct end report, which was positive, EPS’ reports since have been coming in weaker than expected. (ie. NTAP AMAT, WMT, BK, DELL disappoints and many others just ok).

Markets may still get a rally, but it will have to start at lower levels. BTW, 5-6 weeks is still ahead for Thanksgiving to year end on a ‘wildcard’.  Now, handily < 20MA benchmark with expectation of next support being hit without wildcard.  Will update view ahead of Friday morning, if anything substantial occurs last hour or overnight.