Sea Of Red

Asia and Europe are a sea of red this morning. We are supposed to believe this is due to Alcoa earnings and the elevated nuclear concern in Japan.

The trouble is, for me, that I find it hard to believe that Alcoa's earnings have such profound worldwide impact. And while I'm not pleased to hear Japan has raised the threat level, I think it was already in the market.

What else could be going on? Nothing perhaps. This is just how markets work. But the fact that virtually everything is down together that makes me wonder if there is an endogenous cause -- inside each market participant -- that is signaling a trend change.

We'll soon see.

Today the S&P will likely fill the gap from March 29th. The gap is roughly a 50% retracement of the move from the low of that morning, 1305.26. That low needs to fail before there is real cause for concern by bulls.

I'm not a bull. I'm a pragmatic bear.

The only thing that would concern me would be if I missed what could have been a stealth top at 1339.46, and that would only be my ego talking.

The USDCAD went nuts last night, meaning it spiked higher, meaning the US dollar suddenly got a lot stronger against the Canadian dollar. This could be a shot across the bow of the global risk trade.

I also note that lumber is down almost 25% since mid-March. That could be one big ugly canary.