12:25pm (EST)

We were a little surprised to see a higher open this morning as futures were down nearly 1% when we hit the rack last night.  European tensions are running high as their leaders try to figure out a game plan which the bulls viewed as positive.

Germany is trying to rally the troops while the troika cleared Portugal’s next bailout payment.  The latest on Spain still remains them trying to get funds to recapitalize their banks.

The market got an initial pop at the open but is was very short lived as the bears took over about 10 minutes into the session.  As we turn the corner for the second half of trading, the major averages are near their lows. 

We mentioned this morning there are a couple of key events this week which could help or hurt the bulls.  We would imagine this could be Ben Bernanke’s last stand to do something to help stem the global meltdown as this will likely be his last year as Fed Chairman.  While we have said the Fed still has a little ammo left, it compares to bringing a knife to a gun fight.

While there could be a short-term sugar high on any QE3 announcement we still believe the downside targets we outlined at the beginning of May will come into play.

We added a new trade this morning and our other current trades are getting some nice pin action so let’s go see where we are at.

As we head to press, the Dow is down 58 points to 12,060 while the S&P 500 is lower by 9 points to 1,268.  The Nasdaq is showing a decline of 17 points to 2,730.

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