What could have been is becoming a familiar refrain in these days of late-day sell-offs as the Dow Jones Industrial Average looked like it was heading toward a nice triple-digit gain before selling-off after 3 PM New York time to close down 20 points at 10,190.89. The S&P 500 was flirting with the all-important 200-day moving average, but managed to shed two points to close at 1089.63. The Nasdaq eked out a meager gain of less than four tenths of a point to settle just below 2233 while the Russell 2000 looked impressive by comparison, gaining three points to finish the day at 652.

Stats Table

The news flow was once again docile, especially for a Monday, making the decline in stocks all the more alarming. Exclude BP (BP), which has become a headline writer's dream over the past eight weeks, and Monday was a pretty benign day in terms of headline events. The day's marquee news event once again involved Greece as Moody's Investor's Service arrived fashionably late to the credit ratings downgrade party, paring its credit rating on Greece four notches to ''Ba1.'' For those of you keeping score at home, that is in fact junk status.

I think I have been pretty outspoken about my views regarding Greece's ability to rattle global equity markets, but the fact that stocks tumbled on news of Moody's downgrade could be a cautionary tale for those that were feeling bullish after last week's strong gains for U.S. equities. At this point, the investment community knows that the ratings agency are far more reactive than proactive. Meaning they usually do a below average of forecasting problems, but they do a great job of telling us what we already know after the market has been shocked by dour events.

The Moody's downgrade should not have roiled stocks the way it did because Fitch downgraded Greece on April 14 and Standard & Poor's followed on April 27. Why Moody's was almost two months late to the party is anyone's guess, but the fact that this news weighed on stocks the way it did may be a sign that investor sentiment is still fragile.

Of course the problem with headlines related to Greece is that they fuel speculation that all is not well in other Eurozone nations. All is not well in Europe, but you probably already knew that. Spain's Treasury Secretary Carlos Ocana confirmed as much today, saying that a liquidity freeze on international markets is hurting Spanish banks.

What that statement means is that Spanish banks and multinationals are having a difficult time securing financing outside of their home country. One Spanish banking executive said international capital markets are ''closed'' to Spanish banks and companies, according to Reuters. Not surprising given that Spain is contending with an unemployment rate of nearly 20%, the worst in the Eurozone, and the country is trying to implement an $18.29 billion austerity plan. The spread between Spanish 10-year bonds, known as the bono (not the one from U2), and German bunds was as wide 206 basis during Monday trading.

Somehow the iShares MSCI Spain Index (EWP) managed only a small loss on the day, but looking at the chart below, I get the feeling this ETF may be poised to fill in some of gap higher that was made last week.

Spain ETF Chart

Speaking of Europe, BP was down nearly 10% today on more than triple the average daily volume. BP's board of directors met in London today, but no decision was made regarding the company's dividend, which is firmly in the crosshairs of U.S. politicians. In this case, no news was bad news as a lack of clarity regarding the payout has investors feeling skittish.

If you thought Saturday's World Cup matchup between the U.S. and England was a clash of epic proportions, the tussle over BP's dividend between London and Washington may prove to be a more compelling sequel. According to the Independent, a London newspaper, BP's dividend accounts for about $1.45 of every $10.18 in British dividends. So it is reasonable to expect plenty of Britons will not be pleased if BP halts its payout at the behest of American politicians. The other side of the coin is that there are now plenty of Americans that are not too happy about what has become the largest oil spill in U.S. history.

One investor quoted in the Independent story expects BP to acquiesce to political pressure and issue a statement as early as Wednesday that suspends the dividend. BP CEO Tony Hayward meets with President Obama and testifies on Capitol Hill this week and those type of events are rarely bullish for any stock, let alone that has been under the selling pressure BP has been in the past eight weeks.

The options market is betting on a mighty decline for BP as open interest in the July 12.50 puts jumped by more than 33,000 contracts over the past two weeks, the largest jump in open interest in a single contract over that time frame. BP closed at $30.67, meaning the stock would need to drop more than $18 for those puts to become profitable.

Making matters worse are rumors that the U.S. government may strip BP of its U.S. leases, including prized assets in Alaska's Prudhoe Bay and other assets in the Gulf of Mexico. Remember that a BP-led group discovered the Tiber well in the Gulf last year and that find may have 3 billion barrels of crude. Now it appears the company may never tap into that discovery.

The New York Times reported that BP has hired Blackstone Group (BX), Credit Suisse (CS) and Goldman Sachs (GS) to advise on financial options, which may eventually include a sale to another oil firm. If BP is forced to divest its U.S. assets exclusive of an outright sale to a competitor, that substantially lowers the pool of possible suitors. PetroChina (PTR) would be the leader under that scenario because the U.S. government will not allow a Chinese company to acquire U.S. oil assets.

BP Chart

Looking at the charts, the S&P 500 was hovering just a few points below its 200-day moving average when the late-day selling kicked in. The sell-off dragged the index below 1100 at the close, meaning it is going to be that much harder for the index to reclaim 1108 tomorrow. I read a Bloomberg story today that quoted a fund manager as saying his year-end target for the S&P 500 is 1300. Not out of the realm of possibility, but it his hard to be bullish in the current moment with the index chopping around below 1100 and the 200-day line.

I would be near-term bullish on a break above the 200-day line and from there, a move above 1150 would be needed to keep the momentum going into the fall. That said, a move above 1150 may be asking too much in the lethargic summer months.

S&P 500 Chart

Like the S&P 500, the Dow was right near its 200-day line before the late-day selling sent the blue chip index tumbling to a close below 10,200. That means the Dow has to contend with resistance at 10,250 again and the 200-day line about 65 points away. Support can be spotted at 10,120 and then again at 9800.

Dow Chart

The Nasdaq was the lone gainer among the major U.S. indexes, but that is not saying much as the pattern of decent gains being pared by the close was repeated on the Nasdaq. Microsoft (MSFT) finished lower despite unveiling a new Xbox 360 gaming console at the E3 video game convention. Video game makers were mixed on the day, not a bullish sign as E3 kicks off.

Some pundits are out there saying tech stocks look cheap right now, and that may be true of some of the value names like Cisco (CSCO) and Intel (INTC), but I do not see much reason to be run into tech until the Nasdaq traverses 2275. The 2150 area should act as support.

Nasdaq Chart

As is the case with the Nasdaq, I would not be deceived by a small gain on the Russell 2000. The index lagged the big boys last week and broke below support at 620 twice. Resistance here can be spotted at 670 and until risk appetite returns in earnest, I would be cautious with small-caps.

Russell 2000 Chart

Between rounds of golf, I spent a fair amount of time this weekend trying to convince myself that after last week's market action, it was time to get bullish. That is why Monday's trade was so disappointing: The follow-through was not there. Breaking the 200-day line on the S&P 500 is what I need to see to get excited for long trades again.