Desk color/technicals – the BoA disappointment coincided w/the market running into some technical resistance; the tape has really been trading pretty flattish since Tues as the STT-induced rally (starting 7/7) starting to run out of steam; the twin STT/Samsung preannouncements from last week prompted a lot of short covering and some buying among quicker traders. However, the earnings releases out this week (INTC, AA, CSX, ASML, etc) all were viewed as liquidity events (i.e. people taking profits on the strength). There were some larger long-onlys that nibbled over the last few days, but people on the whole were reluctant to stocks higher until there is technical resolution (i.e. through the upper-end of our trading range of 1110-1120) and/or we are further through earnings season (we haven’t even scratched the surface yet). While we are on pace for the steepest decline since 6/29, we are just moving back to the middle of the trading range that has confined the tape since mid-May. That said, desk noting that shorts becoming a bit more confident laying out exposure (first “real” disappointment w/the BoA and failing at technical levels). On the downside, people watching 1070-1071 as the next levels; 1040 is the real important line in the sand for bulls though.
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