Wall Street hit by a Tsunami 2
The Headline news risk remains high.. anything bad and the bears pounce on it. There is no shortage these days and so the market is down below its 50 day moving averages on all three major indexes SPX, NDX and RUT. The volumes are high suggesting institutions dumping shares. The internal on the market are just as lousy and the SPX is trying to hit its previous days lows instead of going higher and it may take it out to move lower. Its all bear territory folks and there is nothing like it. Here is a chart of ES S&P500 futures and its hitting 1260. Please click to enlarge.
This morning there was a horrific bear attack that took the SPX down to 1260 but it recovered somewhat and now its selling off again. I don’t see much support downside, and anything is game at this point with Japan, Libya and gas prices at home. The US economy is poised to be derailed by the rising gas prices and food prices because it will undermine consumer confidence in the short run as they see no way out of this quagmire for the last 3 years.
Obama administration seems to move on to bigger and loftier goals these days. They are talking about education and children and the future as most Presidents do, but they hardly talk about jobs and gas and food prices. Somehow all that looks unimportant to them. This minimalist approach is what bothers me. They get involved in something do few things, and move one to next, while the first things gets minimal results, or none at all. Its all over the place in many things that are done recently.
So what do you do when the market is bad? Stop trading if you can. We are in 100% cash at the moment and should plan on it. Having no position or trade is a position. Just watch from the sidelines as the market creams most traders, they are in it because they don’t quit when its time. The bears will take care of them..