It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way. -A Tale of Two Cities
This market is one for the books. We have been hit with $110 oil, downgrades in Spain, week jobs, Tsunami’s, earthquakes, floods, nuclear meltdowns and the S&P closed down a mere one percent. Japan was taken apart overnight, about 10%, yes 10%. The Japan ETF, EWJ, was murdered at the open, but from bottom to top it had almost a 10% rally today. Good for Japan.
The risk trade wasn’t just taken off, it was dragged through the streets and shot , eerily reminiscent, to me anyway, of the 2008 crash/deleveraging, which I call the great unwind.
Are we out of the woods? I don’t know. I will tell you that if this fire in Japan gets put out, we go higher short term, but the bloom was coming off the rose before Japan, so we’ll have to see. Many got short and unless we revisit today’s S&P lows (which stopped almost to the penny on the 100 day moving average) we may get a continuation of today’s rally.
I was getting bearish before Japan, and we were short. My subscribers had a great day and some told me they had their best day of the year today. We covered about seven shorts into the bloodbath for amazing gains, held our longs, and then went more long on the turn. It was great day.
I posted my morning subscriber note to the public stream this morning, and told you exactly what I was going to do.
Let’s not forget about the Mideast and I don’t mean Ghadaffi,, he’s a clown, I mean Bahrain. I just heard that dependents must mandatorily leave, several hours ago it was voluntary.
Good trading and be careful out there, charts don’t go from lower left to upper right forever.
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