Before the Open (Aug 2)

Posted on by Jason Leavitt

Good morning. Happy Tuesday.
The Asian/Pacific markets closed down across the board – most of the indexes lost at least 1%. Europe is currently down – there are several 1% losers. Futures here in the States point towards a moderate gap down for the cash market.

The dollar is up. Gold and silver are up. Oil is down 59 cents.
The bulls don’t have much room for error here. After 6 consecutive down days, some indicators are starting to get oversold, and the bottoms of the ranges are approaching. The bulls will need to defend their turf or the S&P will be headed to 1200 (see chart below). Does this means it’s lights out for the market…that a top is in place and a bear market underway? I wouldn’t go that far. It’s possible, but other than a couple months off last summer, the trend has been up for over two years. The bulls deserve the benefit of the doubt.
But as you know, I look at the big picture to get a frame of reference and the shorter term picture to guide my trading. The short term trend is down. Sentiment is pretty bad. News has gotten worse, and the market’s reaction to the news has not been favorable. Today’s market (more than most markets I’ve seen over the last few years) has been prone to surprises, so I keep in mind the unexpected can happen at any time. But until it does, we gotta play the downside. More after the open.

headlines at Yahoo Finance
today’s upgrades/downgrades
yesterday’s sector performance
this week’s Earnings
this week’s Economic Numbers

0 thoughts on “Before the Open (Aug 2)”

  3. Neal is saying we are currently running long stops till this after noon
    but i have been saying all along its europe thats the problem
    and we are going to start to work on itally now
    imo we short short squeeze the fed

  10. stay with bonds and metals, but we can try equity longs at support. i am eyeing TF/IWM at the january/march/june low just 10 points lower. the fact that we’re going to the same horizontal support for the fourth time is definitely a bad omen, but we can catch a quick sharp bounce in the immediate term.
    remember how we couldn’t be japan because we could print print and print? well it turns out public psychology will not allow that, just like it didn’t allow it in japan for 20 years.
    oh, if you are thinking how we can get to 1% yields on government bonds with all the debt deficits, check out what japanese government bonds are yielding..

      1. not sure what you mean mr js by usa pride. zombie or not, things are what they are and we roll with it. we are all traders here so there is no room or need for nationalistic fits.

        1. does usa want to be like japan –commonly refered to as a zombi nation –no growth –hidden bad debt—i doubt it can happen and the yeils curve will invert forcing a self revalueation after a lot of pain—it takes courage to change—i think usa can do it

      2. I agree with OZ, the US is toast.
        The US deficit for 2010 was 1.3 trillion. If the US reduced their deficit by 130 billion each year (6%of revenue) for the next ten years the deficit would then be zero, but the debit would increase by 5.8 trillion because even though the deficit was being reduced there would still be a deficit which increases the debit. The 130 billion is about what the US spends on the Iraq and Afghan war(s) each year. Stopping the war expense would help, but where’s the 130 billion for the next year going to come from?
        At this point its ten years later, the deficit is zero and the debt is 20 trillion. If they then started applying the 130 billion to the 20 trillion debit it’d take 154 years to pay off.
        Bottom line; in 164 years the US will be debit free.

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