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The PIGS hide in the Shadow of Earnings and Manufacturing

Another positive day and the markets have pushed EU concerns to the backseat in the shadow of events that are giving reasons to buy, not to sell.  Meanwhile, Put/Call ratio signals caution at .92.

The EU has mitigated global concerns regarding Greece, at least for the moment, but the underlying issue remains and whether or not it is fixed remains to be seen.  World leaders are trying their utmost to project economic recovery and growth, and the markets are willing partners.  Yes, there have been recent indicators validating bottoms or growth, but the fact remains the underlying negatives for the recession have not been "fixed".

Financials remain troubled, i.e., banking in Europe and liquidity in the USA.  Housing may be finding bottom, but foreclosures continue with increases projected in commercial properties.  Labor continues to exude weakness and Consumer Confidence moved a bit higher, but without jobs Confidence will decline again.

A skeptical attitude to the recovery is the prudent attitude.  Don't ignore bearish indicators nor macro economics that define longer term strength in the economy.  China has reduce US debt holdings making Japan the number one US debt holder, outside of the US. 

Summary:  Market Values continue to test the 50-day EMA as resistance.  February equity options expire the end of this week.  Use time decay to your advantage.

CTM trades:

BIDU - a Feb 470/460 Bull Put spread was initiated and filled at 70 cents to take advantage of time decay. 

CREE - the Feb 60 short call was rolled to a June 70 short call at 4.90 credit.

Disclosure: Long BIDU and CREE