Ahead of the open, (30-11)

Entering the trading day, cited the lack of overall participation (volumes down Monday-25%-30%) and the financial sector as notable missing links from the oversold rally day. Despite what will go down as back to back up days, the same trends (financials very weak, BAC,MS) were visible kept the market from more upside” ..need to see low 1200’s decisively broken..” .  Although, most are looking at low 1200’s,(50ma) as the breakout level to a broader recovery to mid 1200’s for SP, it’s been noted here recently 1215’ish - DJIM benchmark 20ma(1225) would be a hurdle on a bounce. All in today, it seemed every market lift, pre-market included post a successful Italian sale and solid “eco data (consumer confidence) was faded.  Do note, consumer sentiment escalating does not mean Q4 consumer spending is a given. Last report was very weak, but didn’t show a big decrease in consumer spending.

Also as noted, EFSF details were not noteworthy as it is not ~4-5x leveraged (1-2 trillion), but market has known for days this thing is a dud.  This is why all eyes are on IMF and hopeful ECB gifts to them to give out.

Most will say a big rally needs to be digested and that is what could be implied today, but Financial weakness was already present during rally day, so it’s not that much of an encouraging day. Still, recently, noted Banks downgrades before end of month, now it’s happened as SP Dg’d 15 banks in US/Europe. The fact this was telegraphed recently to the market, it is probably priced in by now and explains some of the recent underperformance. If it is priced as expected, 50ma should fall next few days.

A leading sector (luxury retailers) yesterday was disappointing today following a guidance call from TIF that weighted on the space. TIF has been a fixture on this Shadowlist for a few years now and can’t recall a disappointing report from the name in that span. The GLW report threw some water on all the post Black Friday hype as far as tech and it’s toys are concerned. Corning is not just tv’s, it’s also tablets, which showed weaker demand. (OVTI guidance AH`s talks of several order cutbacks from Smartphones to tabs to PC`s) Combined, these reports cool off, ‘consumer discretionary’ and some of the glee going forward.

As we come to Dec 8/9 summits with many other events, leader speeches before, be prepared (possible swings), the market will be dominated by headlines and speculation intraday to what will happen or not happen as been the case from past summits.