Market Outlook: Current Scenario Is Similar To The 'Flash Crash'

Last week saw a crazy full schedule of economic data accompanied by market volatility. This week has much quieter calendar. "The first important data release does not arrive until Thursday, when we get May retail sales," said Deutsche Bank's Joe LaVorgna.

Wall Street Strategies submits:Maybe it was the visit by the queen, maybe it was just time, or maybe value players sniffed out opportunities but the market staged an impressive bounce into the close. Granted, stocks were much higher and could have put in a truly memorable session, but for me it's the kind of session when towels are thrown and yet equities still stage a bounce that grabs attention. Beggars can't be choosers, right? Well, there's the problem right there.

Wall Street Strategies submits:These days we all have much in common with Pavlov's dog: we all are programmed to sell stocks at 3:00 pm whether there is news or not. Yesterday there was news, and it was disappointing. I realize consumers pulled back their spending last year in scenes reminiscent of Custer's last encounter, as many households awoke to a reality that they had spent too much and took on too many financial obligations.

Barclays Capital via email reports that German ZEW economic sentiment index falls sharply again in November. The ZEW German economic sentiment index fell to -55.2 in November from -48.3 in September, below our forecast (-52.0) and consensus (-52.5). The current reading is far below the long-term average of about +25 points and reflects the very low expectations of the financial experts taking part in this survey for German economic activity over the next six months.

By Jarred Cummans:Today marked the end of a tumultuous week that saw high volumes accompanied by high volatility. The week saw poor trading days until Thursday came, when all hell broke loose. A massive sell off led to losses of more than 3% in most major benchmarks, as investors hit the panic button in reaction to Fed Chair Ben Bernanke’s speech and policy decisions.

By Price Headley: Not only was it the first winning week in the last five, it was the biggest winning week in the last eight. Oh, it still came nowhere close to undoing the damage/carnage seen over the prior four weeks – a 16.5% drubbing – but it's at least a sign that not all hope is lost.

By Price Headley: We knew we were due for a dip after the heroic rally three weeks ago; last week we got it. Still, it wasn't enough to snap the overall uptrend, nor the spirits of the bulls … traders ended things on Friday in a buying mood, not wanting to head into the weekend empty-handed in case the budget crisis was resolved and/or Europe doesn't fall into the ocean.

Marc Chandler submits:Today’s US employment data is important. Market participants are now well aware that the Census workers will flatter the headline number of non-farm payrolls. The key will be the private sector. Recall that in recent months, the US state and local governments have been laying off people sometimes faster than the census department hired. This was also picked up in Q1 GDP where the state and local government cuts offset in full the new spending by the Federal government.