Morning Breath May 14

Good morning. Happy Monday. Hope you had a nice weekend.
The Asian/Pacific markets closed mostly down. Hong Kong and Indonesia dropped more than 1%. Europe is currently suffering stiff, across-the-board losses. Greece is down 5%, Austria 3.2%, Belgium, France, Germany, Amsterdam, Stockholm and London more than 2%, and Norway, Switzerland and the Czech Republic more than 1%. Futures here in the States point towards a big gap down for the cash market.
The dollar is up slightly. Oil and copoer are each down about 2%. Gold and silver are down more than 1%.
Greece remains the headline story. Will they accept another round of bailout money? Will they leave the Euro? Parliament is split, and that means uncertainty.
Italy and Spain’s borrowing costs continue to rise.
China cut its reserve requirement by 50 basis points over the weekend. This enables banks to lend out a little more than before. It’ll help boost their economy but offers a warning their slowdown may be steeper than first thought…after all, why would they have to resort to such measures.
Indian inflation unexpectedly increased to 7.23% – this could limit their ability to cut rates.
Supposedly 3 execs at JP Morgan will be stepping down after costing the company $2 billion. Bloomberg says the entire London staff (where the loss took place) could be dismissed. Personally I think the CEO should be stepping down too.
Yahoo’s CEO is losing his job. Lieing about whether he earned computer science degree 30 years ago is the reason.
Otherwise I don’t have anything to add to my comments I made over the weekend in my weekly report. As I stated, the bulls don’t have much wiggle room here. Heading into last week they had a little cushion before hitting support. Now they don’t. The S&P will open today near the key 1340 level, and many breadth indicators are pointing down but are not at washout levels. The bulls were able to push prices up intraday a couple times last week, but the overall path of least resistance never changed from being down. Don’t fight it. Contributed by http://www.leavittbrothers.com/