After trading higher overnight, the market opened lower, bounced, and has now broken to lower lows than LOD yesterday. This may be shaping up as another down trend day.
The big story continues to be Northern Africa and the now the impact on the Italian Economy. Italian 10 year now spiking. There are reports estimating that if the Libyan and Algerian oil production is shut in that Oil could see $200 bpd. West Texas Intermediate continues strong, trading at 96.67, while Brent trades at 108.82. The Commodity complex is getting hit again today as speculators liquidate their long positions. Gold is modestly higher, at 1402.8 and Silver is consolidating its blow out move, trading at 33.01. The Euro is surprisingly strong, given the issues in Italy, Portugal and the recent German election results demonstrating the German People are tired of backstopping the ECB. The Euro is trading at 1.3756 and the Dollar resumes its decline, trading at 77.37. I am frankly surprised at this action.. if there is really fear in the markets, it would be normal to see the Dollar rally and Safe Haven bond rally. But for the past 2 days, U.S. treasuries have rallied strong, while the Dollar has weakened. This seems confusing.. maybe the Dollar really is losing its position as the preferred world currency.
The 10 year Note is up over 1/2 point, trading at 3.433% and the Long Bond is up nearly a full point, trading at 4.5521%.
As noted in our Trading Alert yesterday, the Momentum Change indicators have generated a 2nd Sell confirmation and we offered new Short trading ideas in the short levered ETF's. The recommendation is for Stop Loss orders to be placed at the swing point until the trades have an opportunity to begin to work out. As the market moves, I will tighten up the stop loss points.
It would not be unusual to see a bounce in here, which is why the stops are a little loose right now, so that a small bounce does not take out the positions.
Best To Your Trading!
Bill
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