Ahead of the open, (16-05)

US equities tried to bounce but once again couldn’t hold their gains and the major US indices ended mildly in the red (specifically, fears of a Greek deposit flight and remarks by Boehner weighed on markets this afternoon).  The early strength was always very tentative and never had a lot of “real” support behind it.  Trends haven’t changed a whole lot.  The only buy demand increasingly has come from covering and when this covering peters out, as we saw Thurs, Fri, Mon , and again Tues, the tape has a hard time sustaining gains (note that the S&P has pulled back now ~6% in pretty much a straight line since peaking near-term at 1415 back on 5/1 after the ISM manufacturing print).

 

Eco data came in better-than-expected, inc. in the US Empire, NAHB and part of retail was stronger. However, none of these figures was game changing and while they provided some excuses for shorts to cover, they never prompted a lot of “real” long purchases (and keep in mind the Chinese data for Apr continues to fall short of expectations, the FDI figures today were the latest).

  

Despite a better economic backdrop Tues, Greece (and Europe) remains an overhang and is sapping any risk appetite. Note that there wasn’t a big uptick in volumes on the Tues sell-off - it was more the case of early buy demand completely evaporating.  Bulls may point to the R2K outperformance and builder strength.