On Monday chatter on the Street again had everything to do with whether Europe's financial woes would push the US off the side of a clip.
The S&P traded sharply lower and the Dow slipped by triple digits after a budget drafted in Greece showed Athens would miss its deficit targets for both this year and next despite harsh new austerity measures.
The developments brought the potential of a Greece default that much closer. "If Greece continues to have problems that could really drag Europe into recession, and possibly the U.S. as well," explains Randall Warren, chief investment officer of Warren Financial Service in a Reuters interview.
However, that’s not to say there aren’t any positive catalysts in the market. There are.
The Institute for Supply Management's September manufacturing index topped consensus forecasts and the government said August construction spending unexpectedly rose.
"The data supports the minority view that things are going to get better," Warren says. "You can't discount that view even as the market finds it hard to believe, and that's why things are so choppy today."
How should you trade now?
In an environment like this, The Fast Money gang suggests watching technicals. They say the market is flirting with a number of key levels and whether the market bounces or breaks could be very telling.
”I’m watching 1120 on the S&P,” Fast trader Pete Najarian tells us .“It’s been a level of support over the summer. ”If it holds we’re ok, but if we break below it all bets are off.”
Trader Steve Grasso is focused just a little lower. He thinks the market is looking to test 1101. And he tells us the test could come in the next couple of days. And like Najarian, whether it holds or breaks will influence his trades.
Katie Stockton, chief market technician at MKM is also watching the same levels. However her bias appears to be lower.