The news is light this morning, so all eyes are on the euro to see if it can find some support.
Asian markets got slammed overnight, as the euro fell, and that had the futures market trading lower before our markets opened this morning. But the euro started to stabilize, and our markets actually opened on the plus side, albeit it slightly.
Japan was knocked lower by -3.8%, with Hong Kong and China lower also, by lesser amounts.
The dollar is flattish so far, as are oil and gold. Oil is hovering around$71.50 and gold near $1215.
The 10-year yield is a touch higher to 3.21%; and the VIX is only down slightly, trading at 35.20 right now after Friday's big spike higher. This high level of the volatility index is predicting another choppy week at the moment.
Trading comment: The Nasdaq, which had that strong follow through day last week, broke below last week's lows on Friday, on higher volume. This is a negative sign, but there is still a small chance the rally attempt is alive.
As for the S&P 500, all eyes will be watching the Feb. lows at 1044. If those lows are broken, it will mark the first instance of a 'lower low' on the charts since the March 09 bottom. Earnings estimates have been holding up, so one thing the market has going for it right now is that valuation remains attractive, and the economy is still in recovery mode, even as the pace of economic growth is slowing.
After such a huge runup from the March lows, it is not uncommon to see a 20% pullback that does not result in a new bear market. So that is what investors are grappling with. I will continue to watch the sentiment indicators, and feel that if bearish sentiment spikes again as it has during prior pullbacks, it could set the stage for another tradeable rally.
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