Quick note on Japan: All of the Japanese Indexes saw nice gains following their two previous days of heavy selling. NIKKEI and TOPIX up 5.68% and 6.64% respectively. Note though that NIKKEI Futures are currently down -2%. Regarding the Fukushima Daiichi Plant, efforts to cool the nuclear reactor were put on hold as radiation levels surged, but efforts to resume cooling are expected to continue. Japan has stated that radiation levels outside the plant are stable. The story continues to develop.
Instability in the Middle East/North Africa continues as battles between government forces and rebels wage on in Libya, while in Bahrain, clashes between Shiite Muslim protesters and Sunni government forces have escalated. Bahrain has declared a three month state of emergency and amidst the unrest, has closed its stock market today. Saudi troops are on reserve as the Kingdom is worried that similar dissent from the Shiite minority in Saudi Arabia could spell trouble at home. To make matters work, Iranian president called the actions of the Bahrain government "unjustifiable and irreparable."
Data releases this morning were negative:
February PPI +1.6% vs +0.6%. Inflation levels high here at the headline level based on energy and food prices.
February Core PPI +0.2% vs +0.2%.
February Housing Starts 479K vs 575K
February Building Permits 517K vs 573K
With so much instability around the world and potential for breaking news stories that can inspire fear and panic in relation to financial markets, I continue to have an overall bearish view point on the markets. We are currently in correction mode (even with yesterday's technical rally) and until it is confirmed that the market has put in a bottom, I will be confident we will see lower lows.
I would have to reconsider my overall short bias if the ES sees a daily close back above 1300.
For today, I expect slightly less volatile trading, perhaps some minor consolidation as the markets process the recent action. I don't expect to trade above yesterday's highs. Bias for today is neutral to short.
Levels to watch today on the ES:
Resistance above at: 1277-1278, 1283-1284, 1289-1290
Support below at: 1269-1270, 1259-1261, 1254-1255
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Have the volatility today afterall
ReplyDeleteThe reversal off the low this morning (1267 ES) is a bullish one. If we trade back down to the low again today, expect a continuation lower...
ReplyDeleteJapan Nuclear Situation Out of Control
ReplyDeletehttp://gizmodo.com/#!5782239/european-officials-japan-nuclear-situation-is-out-of-control
Market sells hard!
Not interested in any longs at this point unless we confirm back above 1268. Watching for potential sell-off to new lows...
ReplyDeleteIf ES trades down to 1251 and support confirms, will consider a long in the lower 1250s
ReplyDelete