As of this time, all trades have been stopped out and closed. Momentum Change indicators are still Bearish, and I will be looking for a re-entry point this afternoon or tomorrow. The market should have a decent bounce off this huge gap open and should present us with another opportunity to get short for the next leg down.
The news out of Japan is on every media outlet, so I assume you current. Many observers are concerned that financially, Japan is in no position to deal with the disaster with out severe consequences to their economy. At this point, there is no understanding of what they will be able to do that will not reverberate through the world markets with a deleterious impact on every asset class. This morning, there is not an up tick in any of the commodity complex, with Oil trading down hard at 98.07 after trading as low as 96.71. Gold is also down, trading at 1398 and Silver at 34.43. All soft commodities are down hard, over 3% in every market, with Wheat leading the way, off 6.5% The surprise for me is how little impact this even is having on the Euro, down a little at 1.3946, while the Dollar is a little higher at 76.56. I don't think the little bounce in the Dollar bodes well for the continued recognition of the Dollar as the "Safe Haven" currency.
The bond market are strong, with the 10 year Note up a half point, at 3.286 and the Bond up a point at 4.468% The U.S. debt markets are showing strength, coming off long term support, that if continued, will have a negative impact on the equity markets.
I will have some charts and some ideas this afternoon as the news out of Japan is consolidated into the markets. IN the meantime, what is clear is that major support has been broken by all the major equity indexes, and serious damage has been done. The Momentum Change indicators are still working with the last Sell confirmation signal, and I am looking for a point to re-enter the short side. But know that the next signal will be a Buy signal and we want to be able to catch the market near its turn. So I will be on high alert for a bounce off support around 1260 on the SPX, and wary of a new Buy signal that could be just around the corner.
Best to Your Trading!
Bill
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