It's About Apple (But Really About Spain!)

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plaza reial barcelona spain

Blame Spain, but it was really Apple's fade that killed our chances for moving aggressively into the black.

Am I the only one who thinks the Apple conference is a relative non-event? Apparently not. AAPL started fading just after 1pm ET when it became clear that no big announcement would be forthcoming (Facebook integrated into iOS 6? Please). The S&P also promptly faded and as we head into the close the S&P is near the lows for the day.

Forget Apple. This is an important day for a different reason. A big European bailout has been declared a failure by the markets.

This was the FIRST TIME we saw a European bailout that failed within HOURS. The markets have said it's not good enough.

Bonds have rallied. Again. Rates are effectively ZERO.

As one trader said to me, "No returns=no investments=no growth."

Traders don't want more debt on debt, they want 1) a restructuring of sovereign debt obligations, and 2) a massive restructuring of the southern European economies.

A restructuring? Like Greece? No way, they say. Not for everyone else. So far, everything is being done to preserve the bond holders. But we now have a sovereign debt crisis alongside a banking crisis. The governments can't bail out the banks, and vice-versa.

They can't get anything like that any time soon. In its place, you will see: the ECB will resume bond purchases, and another LTRO--number three--soon.

Meantime, this should be one of the heavier weeks for volume, but it's not starting out that way. This is quadruple witching---the quarterly expiration of stock and index options, and stock and index futures. On top of that, this Friday is also a quarterly rebalancing in the S&P 500, and next Friday is the YEARLY rebalancing of the Russell 3000 and Russell 2000.

All of this would normally produce volume, but traders seem paralyzed, staring bug-eyed at European headlines. Guys are not turning their books as much.

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