Market Analysis

This market doesn't look very promising right now. Seeing more red pop up. Financials remain the weakest industry right now. The market needs the support of financials to rally. I would not be holding any long positions in financials at this time. Money seems like it is being directed away from equities and into US bonds right now since they are the safest investments at this time. The Euro is getting destroyed as the US Dollar ramps higher. Despite very large standard deviations in those two currencies, I would be cautious trying to fade these as there is tremendous political uncertainty. Gold, cotton, and gold miners remain the strongest besides treasuries.

Things I'm looking at for the coming weak: I will try to find possible areas to get long German markets and the Euro if some political uncertainties can be cleared up in Europe. Also, I like cotton at these levels if the market can bounce. Just be aware of the huge bear flag developing in US Markets, a close below the flag could ignite a fresh round of selling. It could get very ugly. Be prepared to exit longs as I think we could see another 20% decline in the markets bringing us to 90 on the SPY and 9,500 in the DOWJ from a current 12,000.