3/22/2011 Tuesday Morning

The short positions entered late yesterday afternoon, with very tight stops were stopped out near the close.  I knew that was a possibility but there was also a good possibility that there was a good profit potential.  Here is a chart of the 15 minute SPY.... showing how the market is having difficulty throwing over the downtrend line. 

 

 

 

 

 

 

Click to Enlarge

The Momentum Change indicator Sell signal is still in effect, but is in a neutral position and yesterday, intra day, the SPY and the RUT moved temporarily into the Buy position, but faded on the close.  So action today and tomorrow is very critical.  There is a very good possibility that the SPY can overthrow the downtrend line, while it is also possible that it can re-test the lows of last week.  As this is written, the SPY is falling away from the encounter with the downtrend line and the potential new Buy signal is fading away.  For Now!

Now that the earthquake related troubles in Japan are considered "old" news, it is possible for the markets to consider the problems in Europe, where we learn that Ireland has missed a coupon payment, that Portugal debt is again reaching new highs on political unrest regarding the austerity measures.  In the U.S, we learn that residential RE has resurfaced as a problem, with unit sales falling to new lows, 10% under last month at 466,000 annualized units, missing estimates of 510,000.  And all over the world, inflation is causing distress, with inflation measured in the UK at 4.4% and the misery index has hit a 20 year high.  In Libya, the U.S. Air Force lost a fighter due to mechanical failure, and the the Rebels seem to have re-gained momentum,  And the real hot spot may turn out to be in the Gaza Strip, where the Palestinians and the Israelis are throwing explosives at each other, with 3 being killed last night.

After being higher overnight, with a 4% gain in the Nikkei, U.S equities market opened mixed and as of this writting, the Dow is down 27, the SPX is down 4.22 and the rest of the major indexes are also down.  Oil is trading higher on the new problems in MENA, trading at 103.12 and Brent is trading higher at 115.4,  Gold is higher at 1427.4 and Silver is close to new highs at 36.39.  The Euro is soft, after reaching highs above 1.42, while the Dollar has caught a bid and is trading up at 75.54  Bonds are mixed, with the 10 Year trading off at 3.337 and the long Bond trading higher at 4.442%.

There are no trading ideas today....if the SPY runs back up to the down trend line with out flipping to a Buy signal, I will post a couple of new shorts, again with very tight stops.

Best to Your Trading!

Bill