Your MUST-READ Morning Stock Futures Cheat Sheet: Greek drama

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The Precise Take – Greek drama

Big Picture Analysis:  As we write, the ES has sold off more than 70 handles from Friday’s close.  Yesterday’s bankruptcy announcement by MF Global initiated some risk-off profit taking.  And, while it was not nearly as systemically risky as Lehman, there are parallels that are not going unnoticed.  The major driver overnight is a “surprise” announcement by Prime Minister Papandreou that puts in doubt the 50% haircut resolution on Greek debt achieved last week.  Interestingly, this increases the odds of near term ECB support along with a possible rate cut on Thursday, as Mario Draghi takes control of the ECB only today.  We had wanted to see bulls support 1235 as a sign of intermediate term strength.  With that level convincingly out of the picture, it will make resumption of the October rally more difficult.  The critical area is the low 1180’s volume support which, if broken, points to a retest of the October low.

Unfortunately, our price action chart support and resistance chart became corrupted and we will have to reconstruct recent activity manually because of a stale backup.  In the meantime, we’ve drawn in some areas in the volume profile chart.

Click above images for larger size.

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ISM Manufacturing at 10:00 am

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