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What Has Changed?

This is the all important question to answer in order to understand if the "correction" is a "correction" or if it still has legs to push lower. 

The trigger for the current downtrend has been concern regarding the Eurozone and the debts that members states carry.  The concern goes to the ability of these debt ridden states to find fiduciary sanity in order to mitigate expectation of default. 

Has this concern been allayed? and will the Euro find bottom as a result?  The bottom line is emphatically, NO!  In fact, China has recently expressed concern that is exacerbating the lack of confidence as profits or losses are booked by those seeking to "de-risk" themselves of the market volatility.  There are those that have recently stated that the EU issues will not impact the US and then there are those like Steve Ballmer, MSFT's CEO, that suggest otherwise.  Based on past experience, I'd put more weight in what Corporate America says and take what government officials say with a "pound of salt".

DO NOT ignore geopolitics in Europe, nor the issues surrounding the Korea's.  The Korea's are posturing and tension is high, while War is not likely, the uncertainty regarding North Korea's decision making is concerning.

US economic data continues to project better numbers as housing data from New Home sales and manufacturing numbers from Durable Goods indicate improving conditions.  Outside of Labor the past few months BLS reports show improving baselines.  Concerning, though, are States numbers as they seek to generate falling Income tax revenues with increased fees and taxes and deficit spending continues, we may find ourselves in a similar position as our EU friends - yes the EU and the USA situation is not an apple vs apple scenario but don't ignore the debt and defict spending impact on credit rating and confidence.

Summary:  Remain protective and when the bottoming process is more firm then protective positioning can be closed - we are not yet there, however.

CTM trades:

AMZN - the June 140/145 bear call was not filled at the requested .40 credit.  I'm initiating a 135/140 Bear call at a limit order of .60 credit.  Resistance levels as per option volume are at 130 and then 135. 

RIMM - no changes.  60 continues to be tested as a support or resistance level.

Disclosure: no positions on MSFT, bearish to stagnant on AMZN, RIMM is neutral.