President Obama’s jobs speech produce a brief bounce right after the speech, but chaos in Europe grabbed the headlines. Rumors that Greece may be defaulting soon and key personnel change in the ECB were the major worries. Since Greece has supposedly been saved at least a half dozen times already, will the G7 meeting save it again? The situation in Europe seems to be becoming less certain and more unstable. August lows are not too far off and a gap below the channel may create some anxiety Monday morning. If we can’t hold the 113-115 band that had supported the market for 3 weeks or if we get a weak bounce in that area, we will likely take out the August low. On the other hand if there are no terrorist attack over the weekend or if there are some coordinated global easing, we could easily squeeze the other way. At the moment, I think the first scenario maybe more likely and further down side early in the week may set up buying opportunities during mid-week of option expiration.
