FUD it is back and along with it volatility $study

Around the Globe

    Asia – CLOSED

  • Shanghai (China) -0.00%
  • Hang Seng (Hong Kong) -2.61%
  • Nikkei (Japan)-2.78%

Europe as of 6:56am EDT

  • DAX (Germany) -0.77%
  • FTSE (UK) -1.93%

Today’s Economic News:


We highlighted the terrible Spanish number.  The European sentiment is poor and the French election did not help.  I am not sure that the French are celebrating a new day and a new way as much as they just want a different person.  Incumbents should be shaking, the natives are getting restless.


We could be seeing some intervention this week to try and still the waters. On reality side, the German factor orders showed a nice upside surprise.

Quote of the day:
The one function TV news performs very well is that when there is no news we give it to you with the same emphasis as if there were. – David Brinkley


Current Allocations from our room:


Performance Month to Date from our room:


Current Breadth Readings:



Breadth continues to be very bad and suggests that if the market does sell one more day, that there would be a short buying opportunity.


ES SP500 Futures Comments:


Volatility is back!  FUD – Fear, Uncertainty and Doubt have re-entered the arena and we need to make sure we are adjusting our trading.. wider stops… smaller orders… larger targets.. lower time frames.. 


The overnight gap low is trying to rally back.  We don’t expect it to get above the 1371.25 area and we think selling will be contained down to 1345 area.   Ranges are getting big again and we need a couple of days of trading to help us better sharpen our scalpels.  Right now we are cutting the trades with a blunt sword.


Breadth suggests another day of selling would setup a decent bounce perhaps to the 1380 area.  We need today to close to better calculate that.   It could be a good day to stand aside unless you have a strong bias.  We are in short the rally mode now as the longer term breadth charts are suggesting more downside.



US Dollar DX Futures Comments:

The dollar is reacting to the Euro and the European news.  If the markets can not hold intraday today and begin to fall we suspect that the dollar will begin to rally to the 81 area and begin stepping up. image

TLT Twenty Year Bond EFT Comments:

Just a month or so back we spoke confidently of the 120’s being behind us, never to be seen again , but the backsliding of Europe and slowing  in the US has put the interest rates comfortably in the low range.  Today we expect TLT to break that one month range and begin to challenge the 119s.


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