Stock futures and bond yields have both bounced to areas near yesterday’s breakdown. Thus as everyone asks.. “Is the LOW IN?” That looks doubtful given this morning, as we haven’t seen near the progress needed. Yesterdays’ volume was well above average for SPY on a post-Holiday return, and the VIX responded , yet little evidence of any real fear, as marked by Equity Put/call readings. The biggest worry is that we’re finally seeing Credit weakness which hasn’t been present for over a year. High yield OAS spreads broke out of important 1 year downtrends, indicating this could be a bigger deal than just a 1-day affair with Italy and then all’s back to normal. Dollar meanwhile showing some evidence of backing off this am.- Given that Financials have broken down materially following suit to Europe, some larger evidence of stabilization is necessary here along with seeing whether Technology can hold up in the wake of recent FX/Yield volatlity. For S&P FUTURES> 2709 will be important to exceed to have any hopes of a further rally. Any failure that gets back down to today’s lows 2685 would be a big negative and something which likely leads S&P down to 2646-50 area at a minimum.