Markets gapping down this morning in the US on the heels of sharp losses in Europe on Monday. The quick descent we have seen over the past few trading days has brought price back towards attractive levels. The latest decline is setting up to give us a higher low in what is still an upward channel off the early August lows. Support, of course, must hold in the lower 1130s (ES) for this to hold true. As long as we don't see a daily close (today or tomorrow) on the ES below 1133-1135, I like long entries and will expect to see a rally back toward 1200 (ES) and higher.
In the News:
A commitment by Switzerland to set a minimum exchange rate target for its franc at 1.20 per euro and purchase foreign currency in unlimited quantities was met with a positive response in Europe, but pessimism has prevailed as stocks have now sold further there. I expect the news to push European markets higher though once it is digested further. The Swiss Market has jumped 4% on the news while the Franc is down over 7%.
Tomorrow (Sept. 7th) the German courts will decide on the legality of the Greece bailouts. Global markets may see continued volatility as the courts make a decision. Ultimately I believe the courts will rule in favor of the bailouts which will be positive for markets...
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Great blog. Will apreciate if you can post pivots for spx as you have done previously.
ReplyDeleteThanks, I'll see about posting the levels again... perhaps for October.
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