The market is pulling back again today, led by big declines in Asia overnight and a continued correction in commodities after their big run. China was down the most overnight, declining 5.2% on profit taking over concern that China's central bank may have to raise rates more to fend off inflation.
This led to further selling in other Asian markets, and Europe is lower this morning also. The dollar is a bit weaker today, but that isn't helping oil and gold, both of which are lower. Oil prices are near $86.35 and gold has pulled back to $1388.
There isn't all that much in the way of market moving news here in the U.S. The G20 is meeting, but so far there have been few headlines crossing the wires.
Today is the first day of the Fed's new QE2 program, but I'm hearing their buying has been delayed due to technical issues. For its part, the 10-year yield is climbing to 2.68%. It will be interesting to see if longer-term yields continue to rise in the face of the Fed buying.
Trading comment: The market is finally pulling back a bit, and I want to start doing a little buying. The S&P 500 is approaching 1200, which would represent a 2% pullback from its highs. Leading stocks continue to hold up well, and that is where I will look to add exposure.
There are some yellow flags popping up, like rising investor bullishness and low put/call ratios, but they haven't turned to red flags yet. I still think after some pause/consolidation, the market will have another move to the upside into year-end.
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