9:00am (EST)

The bulls tried to get some momentum going on Tuesday but ran into trouble after stretching resistance.  The bears got a few licks in before lunch following comments from Germany’s Angela Merkel who said they will not support joint-euro bonds.  We talked about this last Monday and said we would expect Germany to throw a fit and how they should go back to their own currency.

Her exact words were “I don’t see total debt liability as long as I live”.  Those do not sound like negotiating words ahead of this week’s European Union summit which dashed Wall Street’s enthusiasm for a productive meeting.  The market turned south on the news and slipped about 0.5% before the bulls recovered.  Merkel’s comments overshadowed the Richmond Fed Manufacturing Index which came in at -3 versus a forecast for a reading of 2.

The major indexes reversed course once the overseas markets closed and traded to session highs going into the final hour of trading.  The bears were able to keep the gains contained as resistance held by the bell.

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