Quick Technical Update

A quick update before the market opens:

1. The SPX came back to the break out point yesterday. We could see a further drop; a .382 Fibonacci retracement of the move off the Oct 4th bottom would bring us to 1182, roughly where the 50 DMA now sits.

2. The CRB has hit the 50 DMA and backed off as of this writing.

3. WTI spot price hit the 200 DMA on the nose.

Of course all eyes are on the situation in Europe where, in typical fashion, there is not enough clarity on any resolution to the debt crisis. However, they seem to be moving into a tighter range on a Greek bond haircut number. How this is handled will have a big impact on the markets.

At this point I believe something like a 60% haircut for Greek paper has been priced in, so anything up to that point will be welcomed as positive by the market. Anything beyond that, including a Greek exit from the euro, will be problematic. The Italian situation will also have high impact. That is just my read.

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