Major averages fell Friday on lower volume as they digest recent gains. Many leading stocks were, however, getting extended to the upside, and when that has occurred previously in this market it has signaled at least a short-term pullback. This is the primary reason why we have advocated a strategy of selling into extended strength instead of chasing it, and buying into constructive weakness as enumerated in our Focus Lists and Pocket Pivot and Buyable Gap Up reports. 

Futures are lower by more than half a percent at the time of this writing as the German government dismissed a media report saying that Chancellor Angela Merkel has ruled out any state aid for German lender Deutsche Bank (DB). Speculation has run rampant that a number of major European banks are in trouble. Indeed, DB and Credit-Suisse (CS) are trading near all-time lows, and in the case of DB, well below the lows it reached in the debt crisis of 2008. DB is currently 92% off its prior highs reached in 2007.