Market Update 2:18pm “Greece Downgrade”

European situation deteriorates on back of the Portugal and Greece downgrade by S&P today – Europe starting to become a focus of US investors as the very strong Q1 earnings season winds down. As was the case late Mon, buyers increasingly on strike and shorts becoming more comfortable laying out shorts into this weak tape. Technically, the sp500 sliced through the 20day MA as of noon (we haven’t closed under the 20day MA since mid-Feb) and now people watching to see if we can hold the 1190-1194 level (on sp500 cash). The larger long onlys are not really panicked on the sell side, but are starting to peel off some long exposure (on the whole, long onlys largely staying put but they also aren’t stepping in aggressively on the weakness).

For the first time this earnings season it looks like some investors becoming a bit tired n w/the “better than expected” headlines and some companies w/great prints are being sold (i.e. see stocks like F, VECO, DD, X, etc, today). The situation in Washington remains a big overhang – the vote failure last night not really being taken as a positive (there is already another vote scheduled for 4:30pmET today) while the optics of this Goldman hearing aren’t great as far as market confidence/public opinion is concerned (although GS shrs hang in OK).