Nasty Head Fake

Yesterday's nice move higher appears to have been a nasty head fake, as domestic equity markets were weak out of the gate today. They steadily ground lower and finished on the lows. The Dow was down about 280, which is the largest single day point drop in some time.

Am starting to wonder whether the major indexes might not have a date with their respective uptrend lines stretching from the Spring 2009 lows.

For the S&P, that would correspond to about SPX 1250 which is also where the 200 day moving average currently resides.

What in the fundamental or macro environment might drive weakness from here? There are many possibilities, cookie. But given how heavy the banks are trading (the BKX was down over 4% today), it 'feels' like markets may be worried about contagion from the ongoing Greece/Spain/etc EU saga.

Over the past couple of weeks, I've been selling strength to get more liquid. Cash level is now at 60%. Wouldn't mind more, as the market action is increasingly taking on a deflationary feel.

position in SH