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Europe Death Wish

Germany's "Death Wish" of trying to talk out the problems in PIGS while Greece is bleeding to death did happen today - literally. 

It is similar to when you try to protect your pocket money when a member of your family is in grave trouble and needs emergency hospitalization and/or blood transfusion.  A simple fact of life many Americans cannot understand why the US government has to borrow trillions of dollars in order to survive as a nation.  The potential stock markets loss yesterday for the US was enought to satisfy Greece's bailout requirement twice over.  Another extra-ordinary setback the whole world cannot afford in these trying times.

It is now a matter of time.

If they woke up from their nightmarish situation and act accordingly;  we will get a massive relief rally.  Otherwise, if things deteriorate further;  people will start thinking of "The End of the World" again once the contagion fear starts making measurable deleterous economic effects outside of Eastern Europe.

I bought additional ES this morning. 

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The wavecount above is not ideal but when true panic sets in; chart pattern tends to go into extreme form too.

They say buy when blood is on the streets.  This time true blood is on the streets of Greece.  Not that I want to do it;  but being a trader has to separate emotion from the job of trading the markets.  At least I do it on the long side rather than shorting Greece and/or Europe.  I bought some NBG yesterday and am suffering the consequences of the extremely bad news today.  Who knows, I might lose big time on this long trade so I set the hard stops today and forget about them.  If the trade works, thank you;  otherwise, this is just another of the thousands of trades I've done before.

For the Bears:

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The Head and Shoulders pattern is working and working fine.  Once the target has been achieved;  there will be more than 65% probability the downside will continue after minor pullbacks to the upside. 

For now, we do not know what will actually happen.  A pullback to the neckline is what most short sellers are waiting for to add more positions.  And they will scuttle their trades if Spx re-mounts the neckline.

For the Bulls:

-   img37.imagefra.me/img/img37/6/5/5/aarc/f...

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My technical analysis from now on will be more on bull vs. bear cases since the uptrend has practically gone already and the downside is starting to make inroads.  But I cannot make definitive bear cases since there is no definitive bear trend.  At least not yet. 

I was positively bullish from Feb 5, 2010 to last week because there was an upside  trend on the weekly and daily charts.   Now, it is more a coin toss than anything.

Addendum:

ES is now able to produce a 1-2-3-4-5 rally and is the process of forming the A-B-C down correction.  The 38.2% usual initial support is working but price will more likely go down to 50-61.8% fibo retrace levels if not the 79%.

-   img37.imagefra.me/img/img37/6/5/5/aarc/f...

Play the Odds but use routine trading procedure - use stop loss provision(s):

-   img37.imagefra.me/img/img37/6/5/5/aarc/f...

I expect a recovery rally attemp until Friday's Jobs Report.  Whatever the result in employment scenario, it will be tinged by the European crisis and thus will become half-full half-empty situation unless it is truly an extremely good news and/or Europe resolves their problems immediately.