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Current Conditions:

The markets are still in waiting mode. Will the news from the Euro Drs. be benign or malignant. Still range bound between 1225 and 1050.

VIX closed at 34.44

Market Behavioral Analysis:

 The Euro plan will determine the markets direction for the next 3 months. A plan that is perceived as positive will break the S&P above the 1225 Pivot and run to at least 1275. At that point we will reevaluate the strength of the move to see if it has the ability to reach the next target of 1350. If the plan does not meet minimal expectations we will quickly test 1050 support and then we will be on our way to 850. In the longer run we expect to get to 850 either after a relief rally or without the relief rally.

S&P Pivot is 1225 if we can close above the next target would be 1275

The bottom line remains that we are in a generational (Kondratieff Cycle) credit destruction, correcting 50 years of over spending and excessive borrowing. The Fed and ECB are and will print fiat until the conflagration burns through all savers wealth.

Econ News:

Jobless Claims                              8:30

PhiladelphiaFed Survey               8:30

Existing Homes                            8:30

LEI                                              10:00

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