The market has been selling the lows and buying the highs overnight indicative of a fairly split view of overall bias. Claims may be seen as a big disappointment as institutions have been holding fast on the bet that the number would hit consensus or maybe even a little better. With this being the big item for the fear mongers we may see a flush from this that is pretty significant. However we may proceed cautiously at least until 10 when we get the Philly and Leading numbers which are both expected to be positive and to a fairly significant degree. If I had to guess I would guess that those come in at expectation and I do think that all things considered the 500k claims isn’t really so bad as it doesn’t really change the picture all that much. This said, we may just flush down and split the difference so to speak today and build a new support area in the mid to high 70s as opposed to testing the mid 60s again. We shall see. The slip in 30 year German yields under 3% is something I think is very significant and will promote more buying in the US Treasuries in conjunction with the weak economic news today. That said the German economy appears extremely strong and with a lack of inflation worries that will give a shot in the arm to equities. That tail has been wagging the dog of late and I expect that to continue. In any case, watch the volatility at the open and close to the 10 AM items. To play it safe stay away from the OL/YL levels as it is just a mess down there and wait for the first big flush down or fade a crawl up after some positive 10AM news if it happens…