9:00am (EST)

The bulls were behind the 8-ball for much of Monday’s session as there was no follow-through from Friday’s pop to help offset the ongoing U.S. and European debt concerns which continue to plague the market.

The selling pressure at the open remained throughout the morning which pushed the indexes below major support levels but the bulls battled back late in the afternoon to hold support.  

The Dow dropped 94 points, or 0.8%, to finish at 12,385.  The index hovered around our 12,350 downside target and traded to a low of 12,296 before bouncing back.  There is still risk down to 12,200-12,000 while resistance remains in the 12,500-12,600 area.

The S&P 500 dipped below 1,300 for the first time in July after falling to a low of 1,295.  The index finished at 1,305 for day, down 11 points, or 0.8%, but still faces a possible test down to 1,275 and then 1,250 if the bulls can’t hold this level.

The Nasdaq declined 25 points, or 0.9%, and settled at 2,765.  We were looking for 2,750 to hold as Tech traded to a low of 2,743 before recovering somewhat.  We would like to see another push towards 2,800, which is strong resistance, but the bears are eyeing the 2,700 level as their next takeout target.

The S&P Volatility Index (^VIX, 20.95, up 1.42) jumped 7% after reaching a high of 21.93.  We have been outlining the 20 area as a level to watch and if we break above 22, expect lower levels of support to be tested.

Meanwhile, Gold is becoming popular again as investors seek safe haven.  The yellow metal traded above $1,600 yesterday and closed at $1,604 an ounce – another record high.

Turning to earnings, the bulls got some god news after Monday’s bell as International Business Machines (IBM, $175.28, down $0.26) and Wynn Resorts (WYNN, $164.89, up $2.27) beat Wall Street’s expectations.  Both stocks were up in extended-trading last night which have carried over into this morning as the race to $200 is on.

The bears got their expected “good” news this morning after Goldman Sachs (GS, $129.33, down $0.83) and Bank of America (BAC, $9.72, down $0.28) reported their earnings.  Shares of these two companies are trading lower after their earnings announcements disappointed Wall Street.

Despite the lackluster earnings from the Financial sector, futures are pointing towards a higher open.  Dow futures are up 80 points to 12,408 while the S&P futures are higher by 8 points to 1,308.  The Nasdaq futures are showing a 23 point pop and are at 2,363.

It looks like it will be a good day for our call options…Subscribers, check the Members Area for the updates.