Pre-open eMini SP 500 Morning Report 5.25.10

This is a guest post from Precision Capital Management

The Precise Take – Equities down sharply on continued Spanish fears

Big Picture Analysis:  The markets got no shot in the arm yesterday, and equities have punished longs overnight.  We mentioned yesterday that so-called Turnaround Tuesdays had been weak recently, and today is proving no different.  The only days that have been strong on average in this correction have been Mondays (notwithstanding yesterday’s weak performance) and Wednesdays, in the latter case not so much the gap as during the day session.  Accordingly, further downside into tomorrow’s open could make us very short term bullish.  However, until then we are bearish.  What makes anything other than day trade shorts risky is the possibility that a coordinated unscheduled news announcement could turn the markets around in seconds, including overnight.  We had believed such an announcement would come by yesterday.  It did not, but the risk remains.  The news calendar has taken a back seat to sovereign debt headlines, but Thursday, the first revision to Q1 GDP will be released, and we could actually make the case for…

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