Your MUST-READ Morning Stock Futures Cheat Sheet: Hopes dashed, for now

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The Precise Take – Hopes dashed, for now

Big Picture AnalysisThe promise of more liquidity and slackened collateral requirements announced yesterday by the ECB was not enough, as shortly after we published, ECB President Draghi dashed hopes (at least temporarily) that the ECB would fund a bailout mechanism.  Below in the 135 minute chart, we can see the broadening megaphone/expanding terminal was broken to the downside, with the prior trend channel support now acting as resistance.  If the beginnings of resolution we had expected for this week do not  materialize today (and odds of that are steadily decreasing), we might expect delays and brinkmanship to produce choppy action into the end of the month.  Accordingly, while further downside might be expected (first major support is now 1218-1221), we don’t expect significant follow through barring a major ratings downgrade of the core of Europe, which itself might induce a major counter response.

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