Don't let the news fool you. We are being told that futures are down hard this morning because of uncertainty surrounding the lack of a new government in Greece. Greece has been over for a long time. The real news is that the problems are spreading. This morning, bond yields are jumping sharply in Spain and Italy. This is what is "not supposed to" happen. But it's been what would happen for a long time. The only mystery has been the timing.
Likewise, the J.P. Morgan mess will spread too.
With ES futures down hard this morning (they gapped lower yesterday when they reopened for trading) the market has given us some ominous information. By not reclaiming the 38% retracement level at 1370.71, the market has tipped its hand yet again. The prospect that this is just another dip shrinks by the minute. It's saying WEAK. Now it will have ample chance to prove how much.
1340 will more than likely get breached today. The question is, will the market find any support just below, or is it heading for a test of the 200-day moving average at 1277 or just the round number support at 1300? Futures look like they're forming a 5-wave impulse down from Friday's high. Is that the end of the move from May 1 or the 1st wave down of a much larger impulse to below 1300? I can only definitively say that these questions will probably not be decided on the open. It's a great day to relax and let the morning play out after such a news filled weekend.
No comments:
Post a Comment