In essence, the above statement is exactly what happened yesterday, which is why I thought we'd see a gap down today. I hope you had a chance to look at the charts presented last night in my post, "Must Read"
If you did look at the charts, then you understand what that "Fleeting Glimpse" of market action was yesterday that led me to say that I thought the market would gap down today. More importantly, I covered all of the major S&P sectors and the charts all showed confirmation, not one chart disagreed with the rest, that makes a very bold statement about the condition of the market and where probabilities have the market heading and does so in bold fashion without having to use a single word to describe it.
The NFP missed consensus by a tad, coming in at 80,000 on consensus of 90,000, but there was some other good news in the report that may have offset the headline number a bit.
The Euro is falling for a multitude of reasons today, but whatever the reason (and there are plenty to choose from), apparently Wall Street had advance notice and thus every chart in last night's large post all showed the same thing, distribution into some strength.
"When you look at charts (price), always keep this in mind-the charts are often unfolding with the intent to mislead"
Among the more important headlines out today, German Manufacturing (The engine behind Europe's growth)missed badly today at a -4.3% drop on consensus of a +.1% gain; which makes 3 consecutive German manufacturing reports that now have German manufacturing on a annualized basis, heading toward a -28% decline.
It seems the G-20 meeting was little more then I thought it would be, a bunch of countries VERY ANGRY with the EU and not much more.
The world has moved beyond Greece in the "Fear Watch" and straight to Italy where bonds took out the 6.3% level before The ECB, with it's new leader, Mario Draghi, stepped in to bid the Italian bonds up-those same Italian bonds that Larry Kudlow says are insignificant as no one has even seen what one looks like, even though they are the 3rd largest bond market! In any case, the ECBs effort lasted about 30 minutes, showing that fear of the next domino to fall is truly Italy if the ECB an't even fight off the Bond Vigilantes for more then 30 minutes.
To make matters more interesting, that Austrian mega-bank I mentioned (as I'm a card carrying member), ERSTE, who among perhaps hundreds of other EU banks, hid significant exposure to foreign CDS losses, is being downgraded by Moody's and the question still remains, how many other EU banks did the same and how much exposure to loss is really out there.
Last, commodities may be a bit wild today as MF Global customers' accounts are transferred to other brokers (less their margin money) so a raft of margin alls will go out today to these customers, many of which can not afford to pay the margin a second time-so look for a lot of selling and covering in the space today.
Key words: German Manufacturing and Italian Contagion.
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