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Monday Market Blues: Dave's Daily

Stocks in this article: NFLXFDNXLBUUPFXBEWQEWGEWN

NEW YORK ( ETF Digest) -- Eurozone issues stole the show on Monday... again. An austerity deal in the Netherlands hit a stalemate, meaning the country could lose its AAA rating. In France election results weren't kind to Sarkozy and it's uncertain, especially with the strong right wing showing, how the final vote on May 6 th will work out. If Sarkozy loses and the socialist Hollande wins then the financial alliance for the EU between France and Germany could be undone. To make matters worse Monday, the eurozone reported the important PMI (Purchasers Managers Index) at weak 47.4 vs expectations of 49.3 and prior 49.1. China also reported another weak manufacturing survey also at 49.1. Toss-in recent U.S. data and the three important regions in the world are experiencing clear economic contraction.

Stocks were hit hard again early but recovered some losses as the day wore on. Apple (AAPL) shares were only modestly lower and may remain pegged until earnings are released after the close on Tuesday. The dollar (UUP) was stronger making for weaker commodity prices (DBC, USO, GLD & JJC) while the only bright spots were biotech (XBI) and bonds (IEF & TLT).

Earnings reports are still coming out with many companies reporting losses (TXN) but beating much reduced estimates. Netflix (NFLX) released disastrous earnings after the close and the stock was hammered.

I wrote subscribers over the weekend to "brace themselves" since this week would be rocky. But, it's only Monday and who knows how things will turn out with Apple and the Fed on deck. Bulls must be on bended knee praying for more "happy talk" or QE from the Fed.

The market is starting to resemble the period between the summer of 2007 and early 2008. Then there were volatile battles between bulls and bears until the latter were victorious. As for U.S. politics and no matter how you feel about existing and potential candidates, who the hell would want the job? Whoever the next president is he will have to deal with some serious problems and do so in a hurry.

Volume Monday was a higher than average which has been the pattern on bearish days. Breadth per the WSJ was negative.

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