Monday Morning Musings

The market is slightly higher this morning, on some M&A news here in the U.S. and also news out of Europe that the EU ministers have agreed to provide Greece with up to 30 billion euros of financial aid. The IMF is also meeting to come up with a plan of their own.

There is not a lot in the way of earnings reports yet, but earnings season kicks off today with Aloca (AA) reporting after the close. Other notables to report this week include Intel (INTC), Google (GOOG) on Thurs., and Bank of America (BAC) on Friday.

In merger news, Haliburton (HAL) said it will buy Boots & Coots (WEL), Reliant Energy (RRI) will merge with Mirant (MIR), Dyncorp Intl (DCP) will be acquired by Cerberus, and California Pizza Kitchen (CPKI) is seeking strategic alternatives.

The euro is bouncing on the Greek loan news, which is pressuring the dollar. Oil and gold are mixed, with oil up a fraction to $85 and gold off a little bit to $1159.

Asian markets were mostly lower overnight, while Japan rose +0.40%; the 10-year yield is lower to 3.86%; and the VIX is making new lows again down to 15.39, breaking below its recent support levels around 16. The last time the VIX was this low was June 2007.

Trading comment: No change to me near-term outlook for a pullback. While the Rydex ratio and the VIX are flashing caution signs, the other sentiment indicators I follow are not at extreme bullish levels. This is one of the reasons I think the pullback could be more mild this time around relative to Jan-Feb. But the market has been up 6 weeks in a row, which is a rare event, so I would be surprised if we didn't get a down week in the market this week.

long BAC, GOOG