{+++}It was a brutal day and clearly our worst day in a while. Stops were hit pretty good as Mr. Bear really reared his head. A loss of confidence in the economic recovery led to a deep, broad-based selloff that sent stocks reeling. Though the broader market suffered its worst loss of the past few weeks, it was able to secure support just above the key technical support at 1180..barely.
All ten sectors were in negative territory, led by industrials (-3.7%), financials (-3.6%) and materials (-3.4%).
The financials looked horrible and CSCO didn’t help matters with a less than cheery report after the close.
The market will need a major piece of good news to get this reversed, the hold at 1180 is a start, but they need to reverse the field tomorrow, or this will get ugly in a hurry. The only positive I see is that money will chase risk again because there are basically zero returns anywhere else. Based on that, I really thought metals and materials would have done better today.The dollar bounced at 200 ema support and the Euro failed at 200 day resistance. I was right on that call , but the rest of the field has been quite sloppy the last couple of days.
Today was the first day in long time that I felt semi idiotic in the market. I think many did. In closing I am NOT feeling good about the markets prospects here. I am sharpening my sword and am ready to take names on the short side.
For starters we need to watch the following etf’s as longs, probably as soon as tomorrow:
EDZ,TZA,SMN,FAZ, and BGZ
I will be at it early on the chat and I will e-mail you if anything develops, I have a feeling it will.
I added FCN and CPLA today as shorts, we are also are short EWP and the Euro via EUO, although it didn’t feel like enough.
See you in the morning.