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Friday, December 30, 2011

Market Thought... new year set up

Today should be a blah day with an upward bias, but going into the new year seems to be far more interesting. Over the past few days some EU chatter has been growing, and the market pretty much ignored the news.  IMO, this is a good thing as it adds evidence to the fact that headline risk is minimal right now. (I just do not know for how long this lasts.)

Things we know:

1. The ECB talks tough, but its in there preventing a credit event. (ECB expands balance sheet.)

2. Greece looks to have hit a economic threshold. Increasing taxes is not working. Either the country keeps evading taxes or the economy can not handle the taxes. (I am sure its a bit of both.)

3. Greece's reforms are moving slower than anticipated, if at all. (This being the most annoying development, or lack there of.)

I think next year will be very interesting, and the conspiracy theorists out there will have a field day with developments if certain leaders do not get their act together.  The powers-that-be I think are done dealing with Greece's inaction and opposition of productive reform every step of the way. (Even though this year was not with out its drama to discuss for years to come.)

Potential short-term catalysts going into the new year:

1. Rating agencies downgrade France and/or Germany. (Negative)

2. China cuts rates. Expected to happen before Jan 23rd, their new year. (Positive)  Also to not, the Chinese HSBC PMI progressed from last months 47.7 to 48.7. (But still below 50, and indicating contraction.)

3. The above may bring back headline risk.

Some key economic developments I am paying attention to is the EuroZone PMI in relation to the Euro.

Technically speaking, things look okay. The DAX has held up fairly well considering it is much more effected by the above issues.

The 10yr yield has also bounced off its resistance, and is ready to potentially push higher.

The SP500 looks fairly good too, hovering just above the 200SMA.

The SP500 should have an EPS of 100 for 2012 (that is 8-10% lower than current estimates). With a PE of 12-14, the potential range could be 1200-1400.  With a credit event fear, we can see the lower PE range. With out a credit event, we should see a trailing PE of 13-14 throughout this period of austerity.

Natural Gas

Natural Gas is reaching interesting levels. NatGas stayed above $2.50 for 10 years. The last time it broke 2 was at the end of the 2001, coming off the internet bubble recession.

In 2009, there was an interesting capitulation off of $2.50.  Between 2.75 and 2.50 may provide an interesting area of support.  Based on the velocity of the move in 2009, this may be the level where producers severely cut back production.

In the past, my favorite NatGas play was CHK.  But I find some their Shale transactions questionable.  For instance, there are subsidiaries buy assets from the parent, which to me always raises an eyebrowThere are also reports of the huge asset appreciation these shale properties have seen. Circular asset purchases with high asset appreciation does not sit well with me. But if these transactions are legit, then CHK is still the better NatGas play.

(These deals are something I am paying close attention to.  In the mean time, I am taking a close look at ECA to become my NatGas play if I continue to not like what I see with CHK's financial engineering.)

Assuming the benefit of the doubt, for now, and CHK's transactions are not shady, then CHK should test 19-20 with NatGas testing 250-2.75. After the test of 19-20, it should see a relatively quick pop to 22.

Thursday, December 29, 2011

MSFT gonna do something in 2012

MSFT's chart is suggesting some interesting movement in 2012.  Over the last few months, the chart has seen an interesting triangle pattern. Higher lows, lower highs and it suggest a strong move up or down is coming.

For the record, I am no fan of MSFT management and their 'reactive' business model, hence stay away from the stock.

The above chart corroborates with the fundamentals.  MSFT has shifted toward next stage tech, albeit fairly late to the game (reactive).  They are in:

1. cloud
2. home entertainment
3. viable mobile ecosystem
4. leverage social element via Skype
5. Bing

The bullish case is to state the above, along with a really low trailing multiple, which would suggest MSFT would push higher from here.

The bearish case is to state the above, and point out the collapse in profit margins the company will see which would suggest a break down from the above chart.

IMO, the truth is somewhere in between. MSFT is too large for the above to mean anything, and their margins will take a hit. But if they are positioned in the right technologies, take more of a proactive approach in entering these technologies (which would mean a change of leadership) and take an IBM approach with consistent buybacks/dividend policy, the multiple may even expand.

With an already high dividend (relatively speaking), and reduced multiple (which is already discounting a degree of margin compression), the bullish bet maybe the higher probability play.

Tuesday, December 27, 2011

Market Thought... interesting set up

The VIX is up while the 10yr yield is testing resistance, and the market is overbought (near the 200SMA).

Not the combination that gets me excited. Under normal times (a time where an entire continent is not on the verge of complete financial collapse), with the above set up, I would be shorting the crap out of this market.

But we are still in a market that is far from normal, with really light trading volume. The above set up, combined with the weakness of the banks today, suggests poor expectations on the Italian bond offering tomorrow.  IMO, the indicators are front-running the actual event.

At the risk of stating the complete obvious, if the bond auction is weak we may get a sell off or more blah movement like we got today.  If the bond auction is not a weak as expected, then the market should keep pushing higher.

Why Motorola will be 'special'

The craziness in Android updates, which is especially highlighted with the Ice Cream Sandwhich update, is a problem that needs to be solved. But the solution is in the works. The solution is called Motorola Mobility.

Does anyone really think, a hardware company under Google's umbrella will have the same problem issuing Android updates as the Galaxy S?  Of Course not. Because the hardware produced under Google will have all these tweaks worked out.

Schmidt, and company, can say all they want that Motorola will not get preferential treatment, the truth is, any Google project manager worth their pay (or who likes their job) will make sure problems like the Galaxy S will not happen.  This is inherently 'special treatment'. 

This will clean up the Android fragmentation, somewhat, but it will definitely cause consumer to shy away from other Android hardware partners. (Or relegate the other partners as second tier android devices.)

2012 prediction

US Banks will be the best performing sector of 2012.

Crazy? Maybe, but I've been called worse.

If we were simply to use Goldman as a proxy, it is trading 30% below book value.  IMO, the discount is pretty justified considering the CDS risk exposure it has if an involuntary sovereign EU default.  This is with out worrying about added US/EU regulation.  There is a potential appreciation of over 20-30% with an ease of EU concerns.

Similar to the US muni market, as 2012 chugs along, and the world does not see EU involuntarily default, then the book value discount to the large US banks is no longer justified.

This isn't a play on earnings potential or growth (except for the regional US banks), its a play on a reduction of uncertainty, which will lead to a stock appreciation toward book value.

Considering all the negativity, and potential headline risk (especially during the times of EU debt issuance), this trade is not for the faint of heart, and will take a set of brass-you-know-what :)

I am playing it via GS.

Friday, December 23, 2011

Market Thought... fundies and technicals align

For me, the market fundamentals and technicals appear to be aligning, and a shift away from headline risk.  I still believe in the global GDP slowdown I highlighted in late November, and we are started to see it within earnings. Oracle being the most obvious.  The expectation leads to slower eps growth, and because the growth is slow, the market multiple will be low.  With the continued threat of a credit event, the market will trade with a multiple near 12. With a slower earnings growth, and no threat of a credit event, the market will trade with a multiple near 13.5-14.

So assuming the SP500 sees an eps of 100 for 2012, this gives a potential market range of 1200 to 1400. The action of the ECB pretty much eliminates a credit event right now, so the market should trade near 1300-1400 (100x13 to 100x14).

The technicals suggests this as well.

The Vix suggests the market will continue to push higher. (But it also will begin to suggest cautiousness over the next few days.  The low end level of the vix should correspond to a SP500 1280-1290 level.)

I will look to take on a market short when the VIX approaches the lower level. (I just think the market will need to consolidate from overbought conditions.)

Based on the above, and continued support from the ECB, the market should not see the craziness going forward. We should see a channeling market, but not one that moves so fiercely in a one day period.

Wednesday, December 21, 2011

some thoughts... GS, SU

GS - If we are to assume for the next two weeks, with the ECB bank liquidity in place, the world will not see an EU country involuntary default, the banks do not look so bad here. (At least for a technical trade.)

GS is testing its low-end support.  The daily indicates a three month bottoming process, where the high 80 level is acting as support.  If a bottoming is taking place, then there is a high probability a move to 100 will happen. Especially if the market takes a positive spin in the next two weeks.

Support for a GS-trade-to-100 being a higher probability move is below...

1. The longer-term trend showcases GS is still in a negative trend.

A move to 100 is likely as it is the top-end resistance for the negative trend.  However, if the banks are really in a bottoming process, the top-end resistance should be breached this go-around, with a positive market. A breach should allow GS to see 105-110.

2. Consensus for Book Value, without an EU country default, is 135 (as per Yahoo Finance :). If we assume a +30% decline, book value is around 105.

So trade to 100 seems very very possible. (I would have a tight stop, and close out of the trade at 89. But, technically, the real stop for this trade should be in the low 87s. Assuming one can tolerate a 5 point loss for an 8point gain.)

SU - SU is trading too low with respect to its production and price of oil. Technically, there looks to be a solid probability that SU approaches between 30-32. (Although with their production capacity and oil near 100, SU should really be trading in the mid/high 30s.)

Timeless Portfolio update

As the year is coming to a close, I will be capturing the large gains in KMP and replacing it with VZ.

I will capture this change at the end of the day, today.

update: I captured a 23% gain for the 2011 year on KMP that I had modeled at a 3-4% gain for the year. (The Timeless Portfolio is at the right of the screen, under Links. The purpose of the portfolio is stated here.)

IBM starting to look good again

I have been waiting on an opportunity on IBM for some time now, and it is starting to look interesting again.  The ACN and ORCL reports have taken their toll, and IBM has declined in sympathy. 

Key take concepts from ACN and ORCL that are very relevant to IBM's businesses:

1. ACN stated that their EU biz was and will be affected by the EU situation.

2. A part of ORCL's results were hit by currency fluctuations. (IBM was hit with this in the past, so I expect IBM to see this headwind as well.)

3. ORCL indicated slower purchasing due to added approval layers.

Right now, we have to take what ACN and ORCL say at face value. But from previous reports, a strong argument can be made that IBM has been taking share. (About a year ago, IBM implemented a customer transition strategy for any potential customer to seamlessly transition to IBM services.)

Also, a few key differentiations between IBM and its competitors:

1. Financial engineering.  I mean that in a good way. IBM is by far one of the most shareholder friendly companies out there, and its buybacks/dividend support the stock.

2. Innovation. Their tangible advances support a better multiple then their competitors.

3. Consistent performance.  (This has a lot to do with #1, along with the nature of their businesses.)

4. Their leading positioning in web 3.0, big data, is firmly established. (Outside of the open source projects, privately held SAS is probably the best positioned for Web 3.0.)

I am looking to enter a position in IBM around mid 177, and adding to that position if low 170s are seen. Both the daily and weekly suggest the same support levels.  The daily does support a push to mid 177 before it gets really oversold.

If IBM maintains a multiple of low 14, the stock should trade near 187 near their earnings report date.

Tuesday, December 20, 2011

hmmm... GOOG

Surprised to see Google acting relatively weak today.  Its at a long-term resistance, but with such a strong market I would have thought the market strength would have facilitated a break out.

Who knows, maybe the market players are starting to see the 'answer' engine threat highlighted in mid Oct.  But now more influential tech bloggers are highlighting the nastiness of Google's search output vs WolframAlpha. (I saw the link via DaringFireball the other day.)

I think this weakness is just due to technical resistance, but the 'answer' engine will definitely be a very real threat in 2012 as Siri's API becomes available, and when WolframAlpha incorporates other APIs into its database. (As it did with BestBuy.) The threat will especially be true if Siri becomes available with Apple TV later in 2012.

In the meantime, GOOG should breakout as they report for the quarter.  May approach 670 before the threat is truly realized by the bigboys.

Market Thought... consensus

There is a consensus, and it ain't bullish.  The negativity is beyond obvious.  Those in the media want to tout 'the optimists' are wrong, but every "optimist" comes with a caveat of prolonged market weakness. There are little to few optimists left. The treasury yield indicates this.

The 'flight to safety' transcends to the equity markets. From a chart perspective, the daily SP500 chart is started to look like shit, with the 62SMA looking to break. Only adds to the negativity.

The few relative bright spots are the longer-term trends. The weekly and monthly are still intact.

Here is a different perspective, in case the end-of-world does not play out:

1. Since the rally started in March 2009, the market has been trading with trailing PE of around 14. (For the sake of this exercise, lets just use 14.)

2. There is only 2-3 more weeks until the year ends, a 2011 SP500 eps of 95 is extremely reasonable.  An SP500 at 1205 and an eps of 95 give the market a trailing PE of 12.6.

If this market typically trades with a trailing PE of around 14, but its trading at 12.6, that means the equity markets are assuming earnings will be reduced by some 10%.  And every time the market goes down from here, it assumes a greater earnings reduction.

At 1205, the market will assume an eps of around 86 (a decline of 9%).
At 1150, the market will assume an eps of around 82 (a decline of 13%).
At 1100, the market will assume an eps of around 78 (a decline of 17%).
At 1075, the market will assume an eps of around 76 (a decline of 19%).
And so on.

Are these declines reasonable?  Listen to the chatter for 5 minutes, and it will give you all the justification you need to believe it to be true. The chatter from the EU and China alone are enough to do that.

But there is one unwavering fact, government austerity alone does not reduce corporate earnings by 20%.  Believe it or not, the austerity imposed at the state level of the United States did not impose a contraction to corporate growth.

Will a sovereign default or debt down grade cause a 20% reduction in corporate earnings growth? When Greece defaulted (I mean restructured) it did not. When Standard and Poors downgraded US debt, there was no impact to corporate earnings.

The lack of interest in the current market, and all the bleak chatter, the players that control this market will keep assuming the worst, until proven otherwise.

But make no mistake, anyone who is now negative, is part of the consensus.

Monday, December 19, 2011

Apple TV... what it could mean

The Apple television is getting traction again thanks to a WSJ article highlighting its progress.  Although, an interesting concept in the article is not so much about the actual TV, but the potential for Apple to act as a service.  To me this seems the most interesting, and truly disruptive force in TV.

We all hate our current cable providers. I know I do. I hate them, because I know they hate me. They don't care about me. When there is disruption to my service they claim they do not know until someone calls and informs them. (WTF?!?) They force me to purchase channels I do not watch in the guise of subsidizing the less watched channels.

What if Apple's TV strategy is to leverage its Apple TV to provide a-al-carte service to the current offerings?

Thanks to the iPad, we already know the set top box is an obsolete irrelevant piece of hardware. Its function, as it turns out, is literally to take up space and collect dust.  And here lies the importance of the Apple TV as it would facilitate such a service to most of the world's TVs.

The implications of such a subscription service to AAPL, imo, would be huge. It would effectively usher in a whole new class of investor to take a hard look at the stock. Basically, the value boys will be tripping over their feet to get into the name. (AAPL valued by the current cable company standards, ebitda cash flow, is disturbingly undervalued. I mean, just compare TWC ebitda to AAPLs. You do not need a complex model to tell you the obvious.)

Toni Sacconaghi already revealed to us last week that the value investors were very much under investing in AAPL.  Having a subscription model would alleviate many of the concerns value investors have from the device-driven nature of the company.  A subscription model would also usher in a new basis of valuation, that would also benefit the stock, especially at current levels.

Technically, the model is now feasible. With advances from content delivery providers like AKAM, and the processing efficiency from FIO, IPTV is very real. The cable companies are already seeing the effects. Albeit, relatively small numbers of sub declines, at the moment, but the world is just waiting for a player to make IPTV user friendly. (Especially since the cable companies are doing nothing in order to protect their legacy businesses. They are fucked if they do not step up.)

This is really good news for Apple's stock. And with market declines, if anyone is looking for a momentum play, take a hard look at FIO.

Friday, December 16, 2011

bloggers getting really bullish, aapl

Just wanted to pass along this info from two popular Apple bloggers. They are getting ridiculously bullish. These guys are not typically to be ignored. The proof is in the pudding, they are typically more accurate than the street analysts.

1. Andy Zaky. After a string of public posts, he tops it off with this one. Basically stating his around $11eps estimate will be the bottom end guidance for this quarter.

2. Andy Zaky highlights projections from Asymco, who agrees Apples is cheap.

I do not produce the kind of numbers these guys do, but I do follow the chatter and trends that give credence to their numbers.  IMO, the most important data point highlighted by Asymco was Apple's CapEx to iOS growth.

The reason I view device adoption rate with such importance is because its device growth rate is a key factor to justifies a company's multiple. (Although, Apple may have gotten to a point that it needs to take on more shareholder friendly practices now that it is a mega cap.)

I already highlighted AAPL's risk/reward profile. But if the bloggers' bullishness is right, we may start to see a new trading range for AAPL after they report.  Although, we should see a run up in AAPL  to the mid 420s as the quarter's end approaches.

Any market decline from a rating agencies downgrade of France/Germany I will add to AAPL. (That was always my plan, prior to these reports, and unload the added position in the low 420s, letting the rest ride into earnings.)

Thursday, December 15, 2011

Market Thought... world war 3, any takers?

Lagarde officially declared the EU debt issue a potential 1930 style depression.  I think she was referring to the exchange of words, and growing hostility, between France and England. But when I see comments like this from someone high up there in the official food chain, I think of geopolitical instability that happened after the depression.

Everyone knows the game of chicken the Germans and ECB are playing. They are only willing to step in until there is enough pain in the markets to force leaders to enact on fiscal responsibility. (It makes for sucky trading.)

Something that did not get too much press this morning is Germany's willingness to stem their bank issues. Commerzbank will soon be allowed to unload its bad real-estate to a state own private bank. (Nationalization of bad assets.)  We basically saw that with Dexia too, but it was France that back stopped it.  I think the model of EU bank nationalization has developed.

Bad assets, that can not be unloaded on to the market, will be swallowed by the State.  State liabilities will shoot up.  If rating agencies are already contemplating sovereign debt down grades, really have no choice.  Debt will get downgraded. If not now, soon after these 'stealth' nationalizations take place.

So, that is the obvious negative news that everyone knows about, and everyone has been touting. However, if a depression or world war 3 does not happen from the game of chicken, the decline of the Euro since late Oct/early Nov, may have played a role in stabilizing the Eurozone PMI data.  In November we saw a 46.4, and for December we got a 46.9.  During this time, the Euro has seen an 8% decline.

Obviously, one data point does not make a trend, but we should continue to see the Euro decline (hopefully in a relatively stable fashion), and facilitate improvement in the Eurozone economies.

A PMI below 50 is not good, and represents a contraction, which suggests a recession, but global markets are already pricing in a recession.  The important part is the stabilization.

If the Euro can continue to decline, facilitate economic activity in the Eurozone and if the game of chicken does not result in World War 3, Europe will be in much better fiscal shape.

com'on rating agencies

Get this ball rolling. Downgrade the core EU sovereign debt already.

I am tired of watching this bullish market hanging on everyone's word. Lets pull the band-aid off and do this mofo!

The sooner this happens, the sooner the big boys will see we will be in a low growth global GDP environment, instead of a global recession.

Wednesday, December 14, 2011

thoughts on GOOG, MA and QCOM

If we get this severe 'deflation' or EU induced global recession, as CNBC was touting today, all day, then the trailing multiples of GOOG and MA are too high.

Despite their healthy looking charts, GOOG and MA, have a tendency to trade with a trailing PE below 20 during times of economic slowdown fears. With fears of a severe slow down, MA traded with a multiple near 17, and GOOG near mid 16. QCOM's chart is not as healthy, but has the same tendency.

GOOG current trailing PE: 21 (There are a slew of technical support, but the 50SMA may be the most plausible.)
MA current trailing PE: mid 20 (The 62 seems like a plausible support. MA is already on the current 38SMA support, not pictured. The 38SMA is what supported MA at the end of Nov.)
QCOM current trailing PE: 21.11 (I am not sure how low QCOM can go. 49-50 seems reasonable depending on any potential market negativity.)

A word on AAPL

An article was released today about AAPL being underweight by value funds.  I found that interesting because I had the perception that it was already owned by everyone via my AAPL valuation thesis.

The analyst who did the leg work discovering this info (Toni Sacconaghi) also suggested a sizable dividend to attract these value funds.  I completely agree with Sacconaghi.

The market stripped Apple's niche, high-growth, status though out this year.  While I believe Apple is still very much in a growth phase, the market has been doubting for months, reducing AAPL's trailing PE for a year.  Basically, everyone that wants to own AAPL for the current story, already owns it.

New buyers need new reasons. If the market breaks the current 1212 level, the market may test 1160-1180. Since a lot of stocks are predicated on market movement, that may lead AAPL to trade lower. (I was not expecting the market to break 1212, but with so much negativity, and the reactive nature of an SP downgrade of the sovereigns its a real possibility.)

I wrote about AAPL's technicals on Nov 10th, and I believe those words are still relevant.

1. During 2011 reduced-multiple trading AAPL capitulated when it was approx. 9% off the 90SMA

2. 9% from current 90SMA level represents a stock price of near 350.

3. The 350 level is huge support.

However, Apple's stock should not see 350 this go around. At low 350, AAPL will be trading with a single digit trailing multiple when backing out the cash.

The daily is tough to decipher at the moment, but the weekly shows a better trend and areas of support.
As a niche player, a company can easily ignore its share holders and investors, letting the company performance do the talking.  The problem with being a mega cap, its that speculators look at 'relative' performance, and if they see weakness, it gives them the evidence to make outrageous claims. (Like Cortez just did on the Half-Time report, that AAPL will see 300.)

The EU has inspired a market that will muddle along, making money managers think long and hard before purchases.  They see relative weakness, they will ignore a stock.  But giving a money manger a reason to purchase, like a nice dividend, relative weakness be damned, we will see AAPL trade in the 450s very quickly.

Monday, December 12, 2011

SP500 - FXE correlation... NO

The FXE/SP500 correlation is officially no more.  I'll just let the charts speak for themselves:

A day prior to the early Oct EU inspired market low/capitulation, the market close of around 1100. The same day the FXE closed near 131.50.  Today, the FXE closed near the same level (mid 131), and the SP500 closed at 1236.

Since Oct 3rd the FXE had a 0% movement, the SP500 had a 12% gain.  Does this look like a correlated movement? (And I have pointed out numerously, throughout the last two weeks how they have diverged.)

The fundamentals of the EU economy, and the need to debase the currency has left the Euro decoupled.

Isn't this just another means of debasing EU denominated debt, that will ultimately help the EU export economies?

If the decline is stable, is this not a good thing, and exactly what the EU needs?

I know Cramer has a different, more horrific perspective, but I am not an economist. (I am a chemical engineer that listens to the data to trade well.)  So, take the economic logic with a grain of salt.

Market Thought... ignorning the end of the world

Sometimes, I find myself just shrugging my shoulders at the market action.  Today was one of those days.

Everyone knows the rating agencies will down grade the core countries.  The money market funds know it too, and they have already unloaded. When the SP500 down graded US debt, it caught everyone (who wasn't told by Standard and Poor's) by surprised. Hence, global markets reacted fiercely.

Despite today's weakness, all technical significance is still intact.

The dollar. Now overbought, and on its trend line resistance.

The 10yr yield. Still holding on to the current low end support. 

SP500. Still maintaining the 360SMA.

On the fundamental side, below is an extrapolation of market earnings expectations from DD's new guidance. A company so ingrained into the economy merits such attention.  They lowered analysts expectations by 4%. Because of this, I conservatively lowered SP500 earnings expectations by 4-5% throughout 2012.  As of 12/08/11, analyst SP500 earnings expectations are listed below with a very low expected trailing PE between 12.5-13.5:

so much for the subtlety

Although the technical conditions for the previous post still remain. (I will post updated charts after the close.)  What looks to be happening right now, considering the mornings chatter, is that the market is pricing in a ratings down grade of the core EU countries.

There was also a mention about china not cutting into this morning.  But judging by the strength of the dollar and weakness of the Euro, the decline looks like an EU issue.

Many of the US Money Market funds have already been front-running this, reducing exposure by 68%. Probably the reason we saw French and German yield up over the past two weeks.  If the US funds are doing this, I would not be surprised if the EU funds were doing the same.

The market looks to be selling the rumor. We saw this with the US banks. Once the actual downgrades came, the banks rallied.

Sunday, December 11, 2011

Market Thought... subtle bullishness

'Subtle bullishness'. It is hard to write these words, especially over the last 5 months.  Seems like every time I did, some headline or EU action came out that destroyed any subtlety.  However, now should be different because of what we know:

1. Banks will not be allowed to cause a credit event.

2. EU austerity is firmly in place.

3. Despite the ECB talk, they are and will continue to buy sovereign bonds.

A review of the financials and VIX suggest the markets are realizing this. The XLF seems to be chilling at technically significant level at its SMAs.

The VIX also saw an interesting sell off.  The sell off suggests an ease of immediate 'end-of-world' concern, and should see follow through barring any sudden negative developments.

Many individual names are indicative of the SP500 chart at the moment.

It sold off on the obvious 200SMA resistance, but bounced off the 360SMA.  The simple question becomes 'will the resistance hold, or will there be a breach?'

The above suggests a breach.  And to further support the thesis is the Dollar and the Ten yr.

The UUP seems like a short-term pull back for the dollar, which should facilitate markets and commodities.

The TNX is sitting on a potential low end support.

Barring a negative headline development, that can shift the current dynamic (like a sudden 'Greek Referendum type of headline') the markets should push higher.