Selling First, Asking Questions Later
Sellers are stepping up their activity across the equity index complex as the post-election buying strike continues. One interesting note is that volume in the pit remains on the light side — why? It seems to me that the indecision facing the country is having just too big an impact to ignore for fund managers and foreign capital.
We are currently trading at 1342, off 30.50 for the session. Limit down comes in at 1337.50. As we continue to trade lower, confidence continues to erode in the marketplace. If this continues, it could spell disaster for the equity market in general. Keep an eye on the dollar, which is holding up reasonably well this morning and the Eurodollar front-month contract which will trace the movement of money.
As for the trade itself, no panic, just a complete lack of buying. Accordingly, we are moving lower, and if this continues, I think we could be in for a move that takes us to 1280 in the SPZ. As for the rest of today, I would play it safe, and expect bounces within the downdraft we are in. Not the best idea to sell lows in here.
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