Of course, it's not just Greece that concerns the markets; the message of the market is that broader European contagion fears are on the horizon. As such, the mid-June Greek election is pivotal for markets -- a defeat of the leftist Syriza Party by the conservative and pro-troika New Democracy Party is essential for the world's stock markets to regain their footing.

As I mentioned above, I expect European policy to address and stabilize the region.

The message of the world's stock markets and the message from historically low U.S. and German Treasury note/bond yields speak to the pervasive growth concerns and growing fears (reflected in the flight to safety). As such, the market's decline (in and of itself) will no doubt adversely impact consumer confidence in the months ahead. Spending is threatened. It will be important to closely monitor all U.S. economic data into the summer months in order to gauge the headwinds to growth. Accordingly, this Thursday morning becomes an important data point with flash PMIs from the U.S., China and Europe.

Another negative, as I see it, is that the reallocation out of bonds and into stocks by invigorated retail investors will likely not develop as quickly as I anticipated.

A revitalization in merger and acquisition activity in the months ahead could offset the ambivalent individual investor. Certainly, the rising discounts to private market value and unbelievably low interest rates could catalyze takeover volume if corporate confidence stabilizes.

Takeover activity is exploding this morning. Yahoo! ( YHOO) has sold a portion of its Alibaba stake, AMC Theatres has been purchased by Dalian Wanda Group, DaVita ( DVA) has announced the acquisition of HealthCare Partners, and Eaton ( ETN) has acquired Cooper Industries ( CBE).

Another positive is that the technical situation has gotten stretched to the downside, and many technical indicators are now at levels that marked lows in summer 2010 and fall 2011. Frankly, I have rarely witnessed so many oversold stocks with attractive intermediate-term prospects. Investor sentiment and oversold readings are at levels that historically have led to a turning point. Wall Street strategists' recommended equity allocations are now at the lowest levels (at about 50%) since the generational low. Hedge funds' net long exposure is low and investor sentiment surveys (e.g., AAII) indicate pervasive negativity. Other positive momentum signs include the 10-day CBOE put/call ratios, the McClellan Summation Index and the percentage of NYSE stocks trading above their 50-day moving averages.

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