Evening folks. Even with a shortened week and many traders on vacation the markets were nasty! Every pop was sold off and there continued to be very persistent selling. The s&p and qqq’s were down 5% in the past 5 days with the rusell down 7%. This tells us that people are taking risk off the table. Anytime you see the russell2k down 7% that tells us that the appetite for risk and speculation is nill. Essentially the markets are goading policy makers into some action. The Germans have backtracked on the euro bailout funds and money printing and are holding up the process of dealing with this debt (as they are the ones that have to backstop it). The 2nd we see some movement from them on that front we potentially could see the mother of all squeezes. Remember in October we were feeling this same way. Hope was lost many traders were throwing in the towel then bam! we went on a record october run for nearly 3 straight weeks. The key is not to try to catch the bottom. Even if we miss the first day or 2 of the rally if you look at the chart of the s&p you can see we tend to run for many days in a row when the news cycle is positive so dont be worried about missing that first initial thrust.
[screencast url=”http://screencast.com/t/IbBBtEixYA” width=”” height=””]
[screencast url=”http://screencast.com/t/B7cV94lYv” width=”” height=””]