some longs to make today’s open a bit frustrating for most. In the last week I talked about taking the foot off the throttle as this week had a lot of questions to answer. As of now if we close lower than the morning open. IBD would probably take us from “Market under pressure” to “Market Correction”.
“Minutes released yesterday from the March 13 Fed policy meeting signaled it planned to hold off from increasing monetary accommodation unless the economic expansion faltered or prices rose at a rate slower than its 2 percent target. Data later today from ADP Employer Services may show U.S. employment increased by 206,000 last month, according to economists surveyed by Bloomberg. China accelerated the opening of its capital markets by more than doubling the amount foreigners can invest in stocks, bonds and bank deposits.” -Mike Cohen
The other huge development overnight is rising borrow costs in Spain. We have heard rumblings that Spain was close to running into problems similar to Greece, but as of yet there had been no alarming rise in interest rates. Today’s debt auction marked the first test of demand since the new austerity budget was presented last week, and the results are not encouraging. Many investors had started to relax about Europe, but this could be the start of another wave of panic across the pond.
The risk-off environment this morning is also characterized by a fall in oil and gold prices. Gold futures dropped nearly $50 to $1,627/ounce, while crude dropped 72 cents to $103.29.
This morning we are down about 10 handles. S&P support is 1396-1402, and this has been the recent floor. That level on the (NYSEArca:SPY) is $139.64-140.20. Another spot is 1391, and a major, major area is 1386-1388 (SPY $139-$139.10, then Major, Major is $138.55ish).
On days like this, you look to see if anything can lead us higher. Any groups or sectors. Leaders acted okay yesterday as there was a lot of selling under the surface. I will see if I can trade any of them to go positive for cash flow (we all know them). If they can’t fill downside gaps, today can break this accelerated/intermediate uptrend. I got stopped out of lots of positions yesterday. We have stops for a reason, make sure to honor them!
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