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The market was as heavy as a bag of hammers today. As you can see above the S&P broke down a bit from that wedge I mentioned in last night’s video. It will want to try and recover that soon in order to prevent a breakdown. We caught a bit of a rally near the end of the day as the IMF agreed to a significantly lower initial estimate for EU banking sector capital needs. That helped a bit, but right after that, the Finance Minister in Portugal stated that the country’s financial situation was “grave”. So pick your poison. Headlines are mixed, but hey are mostly bearish. Remember, Europe holds the cards here, and until there is some clarity, or at least a pause from all the bad news, our market will be under pressure.
Risk appetite for stocks is off again, as the 10 year note broke 2%. Gold took a day off and silver was also lower. If the dollar does continue higher, as I believe it will, silver, more than gold will be interesting to me as a possible short. Most commodities will suffer if the greenback rallies, crude as well.
The financials gapped down, closed near the highs, but I am not impressed, as I believe the sector is at the very top of most institution’s sell lists and I think rallies in the sector will get sold.
We will see if the bulls can take today’s rally into tomorrow’s open.