Semiconductors finished the session on the weak side, albeit just a touch bearish. Financials sold off today. The XLF chart has been in a steady downtrend since the February top. The 2-10 spread falling, see previous Keystone blog posts on this indicator, and also the GS lawsuit and government news worsening, does not help either. Financials continue to place a lid on the market rally.
Copper weakened further today and it keeps acting as a leader pulling down gold, silver, and other PM's and commodities in general, over the last week. Dr. Copper is ill. Copper led the rally from June 2010 into February 2011 when copper topped and has trended lower ever sinice. Copper leads so do not treat copper weakness lightly.
Markets never bottom on a Wednesday, typically, so a healthy selling day on Wednesday typically leads to further weakness on Thursday morning.
SPX:VIX is at 78, watch it in the days ahead, when it loses 68 the markets will sell off big that day.
Volatility bounced today but then drifted lower as the session played on. The markets were content to move into a holding pattern after the initial selling this morning ahead of Trichet tomorrow. Trichet's role in propping up the euro with is hawkish talk cannot be understated. Trichet has singlehandedly continued the euro strength thru his 'strong vigilance' words, which in turn has pummelled the dollar. In a few hours we find out if this trade unravels. The recent rally is euro up=dollar down=commodities up=equities up. If Trichet even hints at any dovishness, then euro down=dollar up=commodities down=equities down will occur. Last week Trichet already tried to tone things down by backing off his strong statement about structured continued hikes. So tomorrow, if he continues to soften his stance on further hikes, then the euro will sell off and the euro down relationship will occur.
Volume on todays down day for the NYA is over 120% of average volume. Keystone continues to see higher volume selling days and lower volume buying days. The institutions keep hoping Joe Sucka shows up to take shares off their hands; distribution.
The ECB Trichet news will be front and center tomorrow morning as traders wipe the cob webs from their eyes and search for the morning coffee. Reference previous charts, UUP, XEU, etc.., by punching them into the search box above to help set the table for tomorrow's breakfast.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.