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Nascent? The "G" in PIGS Impacting Market Sentiment

Greece, Initial Claims and Durable Goods took the Bulls to task as the Bears burst back on the scene today.  Moody's may downgrade Greece' credit rating, making it difficult for them to fund their debt, suggesting increased likelihood of defaulting outside of any helps from the EU or IMF.  The likelihood of a downgrade fed the markets fear and coupled with higher than expected new filings for unemployment and lower than expected orders for Durable Goods outside of transportation, the markets pushed values down.

So, the nascent recovery is certainly not able to put in any solid footing as the roots of the recovery are finding the top soil very thin indeed. 

Some say that the economic data reflect the normal "fits and starts" of a recovery and that a double dip is not likely to occur.  While the ebb and flow, the ups and downs is certainly the way the markets move, fundamental data still remains suspect, especially when you consider the debt, the weak labor market, the deficit spending, the faltering housing industry, failing banks and weak consumer confidence.  Today a recent article suggested that President Obama would require that all foreclosures be put on hold until each can be reviewed by the Loan modification program. 

Consider, also, today's Healthcare Summit.  The proposed bills on the table by the Senate, the House and the Administration require additional taxes and spending that would see billions if not trillions of dollars of additional debt.  Let's be honest, Government has never seen a program that hasn't required spending and Government run programs operate on a "black hole" budget that never sees a reduction.  Furthermore, the proposed Healthcare bills do nothing to create jobs but in fact will cost jobs as small business will continue to find it difficult to find operating capital and the money to warrant the costs of mandated insurance for employees.  Indeed, reform is needed, but not in the context of the current proposed bills of which few understand, let alone the politicians that have put these bills together.

Unless Government reduces spending and finds a way to allow job creation by the private sector, economic and market fundamentals will continue to be suspect and uncertain.

Tomorrow we have GDP numbers and Existing Home sales due, along with the Michigan Sentiment report.  All of these reports will impact market sentiment, but pay attention to GDP data and see how they validate a nascent recovery.

Summary:  A range remains the current direction, but as stated yesterday, being hedged with reserve capital is prudent.

CTM Trades:

AAPL - a rumor of a 4/1 split drove share values higher at the end of the trading session.  If a split is confirmed the longer term direction will continue along bullish lines, but for now no changes to the Iron Condor are required.

STEC - regained some of its footing today, but does not suggest the Bears are done.

SPWRA - maintaining a protective option is prudent as the solar industry finds itself in considerable weakness.

Disclosure: Long on AAPL, SPWRA and STEC