Editor's Note:

The global markets remain hostage to the Greek tragedy playing out in Europe. We are essentially prisoners, unable to escape. Every day the equity markets, the bond markets, and currency markets are battered back and forth by every little headline pertaining to the Greek national debt. The country is unable to pay back its creditors and each new installment of bailout funds only deepens the hole from which it cannot escape.

European leaders are desperately trying to postpone the inevitable default. When the default occurs it could wipe out the European banking system because so many banks own Greek bonds. The already fragile economies of Italy, Spain and Portugal could collapse.

How and when this all plays out we do not know but many expect Greece will default in the next twelve months. We will wake up one Monday morning and find out that Greece finally threw in the towel and gave up the night before. European and U.S. stock markets will gap down on the news. The knee jerk reaction will be very ugly.

Unfortunately, while we wait for this horror movie's climactic scene we are facing some dour economic data here at home. Fears of another recession continue to grow. Investors are naturally reacting by selling stocks and moving into safe haven investments like the U.S. bond market.

This is a very tough environment to be trading bullish LEAP positions. Eventually we'll see another capitulation sell-off. Once that occurs we can start to add to our play list again. In the meantime we are adding some bearish candidates to our watch list tonight. Essentially we need to see a breakout, one way or the other, from the market's current trading range. Right now, the path of least resistance seems to be down.

No new trades tonight. Please see the watch list for potential trades this week.