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The market is obviously reacting negatively to the Standard & Poor’s downgrade of the U.S. debt outlook. Ironically, the Dollar is rallying off of this, with most risk assets getting hit hard. As if earnings season did not offer up enough variables, this development seems to have caught many traders off-guard, with the major indices down nearly 2% at the time of this writing.
In a situation like this, the only thing that you can fully trust is your stop loss, which represents one of the last lines of defense in protecting your portfolio from exogenous events. We have lost the 1300-1332 trading range on the S&P 500, and I have my eyes on 1294 as the next key support level for bulls to take a stand. However, I am in no rush to buy the dip until I see signs of buyers emerging first. A break of 1294 could easily see us testing those March support levels.
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Thanks, Chess.
No sweat, Yogi.
Good advice.
Dollar bid is also due to comments from Germany that Greece will need to restructure before the summer is out. Greek 2yr paper is 20% …
yep, and the dollar index is 45% euro. so who is the PIIG now 🙂
ha
Gotta find some $USD strength here for the sanity of the consumer and the producers everywhere. Selling the EUR seems easy right now.