Reality Resurfaces: Pressures Market
First of all,
I must apologize for posting later than my scheduled time slot. My program for
editing charts wasn’t allowing me to draw lines or arrows so I couldn’t
complete my commentary last night or this morning. The simplest things can be
the most frustrating! However,
the end result of my technical problem is that I was able to see some of the
morning action. So I scrapped my original commentary and redid my charts to
include part of this morning’s action.
We’ve got lots of negative news out
there folks. The Fed Beige Book was incredibly downbeat. It cited that almost
all of our economic sectors, save the energy sector, were in decline —
manufacturing, retails sales, commercial real estate, new construction,
mining, et al. Wage and price increases were moderate though, so
the precious June rate cut is still intact. Retail sales were a
disappointment.
(
LU |
Quote |
Chart |
News |
PowerRating) debt got cut to junk-rating
status by Standard & Poors – ouch!
But that was all yesterday. The PPI this morning was pretty much a non-event
but the announcement by
(
GE |
Quote |
Chart |
News |
PowerRating) that the European Union has put
unacceptable demands on the
(
HON |
Quote |
Chart |
News |
PowerRating) deal that were “unforseeable,”
putting the HON deal in jeopardy, has caused quite a stir. This appears
to have resulted in a catastrophic blow-up for the risk arbitrage community.
But, most importantly, news out of Europe and Asia last night confirmed fears
that their economies are slipping into recession (can someone please tell me when Japan was OUT of recession?) has resulted in extraordinary weakness in the U.S. markets. We’ve gapped down and sold off hard here with no relief in sight so far.
closely to see if we get any signs of selling exhaustion.
major indexes below, with my comments on each. Watch our key areas of
support on the major indexes. If you aren’t short, you may want to step
aside and let this play out today and tomorrow. If you are short,
watch the TICK and TRIN for signs of selling abatement, set your stops and
ride this out.
Right now, it’s back to trading
for me….Good luck to all!
