1:10pm (EST)

The bears are picking up where they left off on Friday as futures were suggesting a lower open throughout the night.  Much of this morning’s headlines have come from overseas as the Europe debt crisis continues to be an overhang.  The eurozone finance ministers are meeting again today but tension is mounting in the countries that are against increased sharing of the debt load.

There is chatter that some of Europe’s top brass is now planning to give Spain some new leeway measures to meet their deficit targets while others are against it.  The uncertainty has pushed the credit yields in both Spain and Italy higher with Spain’s 10-year government bond popping over 7% again.  Italy’s 10-year bond is above 6%.

Here at home, the focus will turn to earnings which start after the close of trading.  We covered Alcoa’s (AA, $8.67, down $0.06) numbers this morning and where the stock could be headed in after-hours trading.  We mentioned an earnings miss would not set a good tone for the rest of the week and estimates are for the company to earn 5 cents a share.  The stock is a Dow component but accounts for only 0.5% of the weighted index so it won’t move the Dow a huge amount either way.  JPMorgan Chase (JPM, $33.85, down $0.06), which reports Friday accounts for 2% of the percentage weight.  For you trivia buffs, International Business Machines (IBM, $189.03, down $2.38) makes up 11% of the Dow’s weight and reports their quarterly results on July 18.

As far as the major indexes, the downside momentum has picked up as we head into the second half of trading.  The Dow is down 74 points to 12,698 while the S&P 500 is off by a six-pack to 1,348.  The Nasdaq is showing a decline of 15 points and is at 2,922.

A close below Dow 12,700; S&P 1,350; and Nasdaq 2,925 would favor the bears heading into tomorrow’s open.

We released a new trade earlier this morning and we have done some chart work to show you our expectations on where we think the stock (and our put options) are headed.  Subscribers, check the MA for the updates.