The market has worked to get traders to believe in the range, buy at 1120 and sell at 1200. I no longer believe that range is valid. The fundamentals are getting worse every day. It is being reflected in all the world indices except the US. Europe believes press conferences, Greek bailouts, and band aids will make the problem go away. Nothing ground breaking has come out from Europe to stop the banking crisis.
The US stock market is the last bastion for long only funds to maintain their equity exposure. They are scared to death of European equities and they are getting killed in emerging markets. Ironically, two of the weakest markets in the world, China and Brazil, are probably the two countries that investors still like.
A break of 1100 is imminent, probably next week. Beyond that, you have an air pocket, where panic and liquidation could push us down to 1040 at the worst. Best case scenario, I see this market breaking 1100 down to 1080, and then bottoming there. Either way, we've got more downside to go to reflect the new fundamentals of a helpless Fed, slow acting Europe, and deteriorating Asia.
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After an almost 500pt move yesterday, I thought for sure we would see a capitulation day today?
Where is the fear?
No spikes today?
Not even a 2% move?
Like they are waiting for something.
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