Wednesday closed the day very red across the broader markets.  The Nas Composite -3.00%, NDX -2.83%, SPX -2.81 %, Dow -2.49% and RUT –4.01, with a TRIN that closed at 5.24 the second highest TRIN in 2010.  June 29th closed at 6.06, leaving 5.24 the 2nd highest and 7/16 at 4.96 to round out the top three TRINS on the year.  The VIX is back over the 200dma and closed at 25.39.  Gold closed up $1.70 to $1199.70 and oil down $2.23 to 78.02 a barrel. 

June 29th the 6.06 TRIN did not bring much of a bounce on the 30th and even into July 1st, which has marked the intermediate low we’ve been lifting off.  However, the opening on the 30th opened relatively flat so reflex snapback came in.  The extreme close today with a gap down would likely be exhaustive and let the market bounce to work off the oversold conditions.  That is the first scenario we look for.  Flat opening some reflex lower is likely and a gap up would be the last thing we want to see and leave us flat footed most likely.  I would look to sell into strength though, just very carefully.

With Cisco reporting earnings after the bell the market pushed lower in the globex session.  CSCO closed at 23.68 and traded down to 21.91 off beating by 1 cent and pretty much in line revenues.  Certainly did not blow the lid off anything and the conference call was pretty mixed outlook with Chambers thinking things are still slowing and presenting challenges.  He doesn’t usually promise a lot and likes to just deliver, so nothing was out of the ordinary to me. 

Futures did not test the daily pivots and closed just under S3 on the NQ and TF, the ES was right on S3.  The bounces were nonexistent and relentless selling throughout the day.  The ES has 1081 support with 1068.75 as the next key area.  The NQ 1834.25 support and 1811.50 support to follow.  ES back over 1091 look for 1100.50 to test.  The NQ back over 1856 and look for 1868.50 to test. 

Economic data for the week (underlined means more likely to be a mkt mover): Thursday 8:30 Unemployment Claims, 8:30 Import Prices, 10:00 FOMC Member Duke Speaks, 10:30 Natural Gas Storage.  Friday 8:30 Core CPI, 8:30 Core Retail Sales, 8:30 Retail Sales, 8:30 CPI, 9:55 Prelim UoM Consumer Sentiment, 9:55 Prelim UoM Inflation Expectations, 10:00 Business Inventories, 11:30 FOMC Member Hoenig Speaks.

Some earnings for the week (keep in mind companies can change last minute:    Thursday pre market EAT, KSS, PRGO, WEN and after the bell ADSK, BBI, JWN, NVDA, TRMA.  Friday pre market ADES, CTFO, JCP, and nothing after the bell.