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At least with respect to the Greek bailout news on Monday, European stocks have officially sold on the news as the German DAX in particular is back to Friday’s close and Greek stocks are falling 3%+ to a 3 1/2 week low. The signs of a short term market top are also clear in US markets with the weak action over the past week in transports and lagging performance in the Russell 2000 over the past week. In terms of catalysts of substance, all eyes are on next week’s 2nd LTRO from the ECB with estimates ranging from 200b euros to 1T, a spread that something larger than a truck can drive thru. The Feb euro zone mfr’g and services composite index fell back below 50 at 49.7 from 50.4 and below expectations of 50.5. With respect to the gift the Greeks are getting with a reset lower of the interest rates they will pay on borrowed money, a German official said to Ireland and Portugal not to expect the same treatment. Spain and Italy are also paying a higher borrowing rate now than Greece. In Asia, the flash HSBC mfr’g PMI rose to 49.7 from 48.8, a 4 month high but remains below 50 for a 4th straight month. On the modest bounce in mfr’g, the Shanghai index did rise to the highest since late Nov. The yen has touched 80 vs the US$ for the 1st time since July and the Nikkei continues higher in response. In the US, purchase apps to buy a home fell 2.9% to the lowest since Oct while refi’s fell 4.8% as mortgage rates were little changed. II: Bulls 51.1 v 54.8, Bears 26.6 v 25.8

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