More Fear in the Markets as Futures Sell-Off

Seems that fear is spreading around the world in regard to the financial markets. Futures sold off pretty hard just before 9:00pm EST last night. It has been suggested that the cause of the quick decline could be attributed to a rumor that a snap election will be called in Greece. But, the sell-off is more likely a correlation to the sell-off in Asian markets in reaction to news that earnings for companies on the MSCI Asia Pacific contracted an average 11 percent last quarter, the first drop in at least six quarters, according to a Bloomberg article. Another reason for the weakness could be that investors are pricing in the effects of a potential European airport shutdown if ash from the recent Grimsvotn volcano eruption in Iceland impacts flight safety.

Even with the current weakness and fear that is spreading across the markets, I bought the ES this morning. You can follow my position here.

I expect the 1300 level on the ES to hold today, but with negative news around the world, we could see a further move down. I'll be on a plane this morning, and I don't plan on managing any positions from the sky. We'll see how the day unfolds. Its a dangerous way to trade and you shouldn't do it unless you have a very specific trading plan.

The key thing to watch looking forward is the current rise in the US dollar. I expect the dollar to find resistance soon and turn back down toward the lows. If this does not happen, equities will likely continue their slide even lower.

I close with a video showing giant ash clouds from Grimsvotn as seen from the sky: