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July 2, 2008

Big Trouble

The market is in big trouble. Traders were denied any relief rally in stocks or any relief from higher oil prices, and the concurrence of these events is no coincidence.

stock chart

This morning's tepid open chased me out of those index calls from yesterday. If were were, indeed, to see a bear market bounce, the open should have been explosive. Since the market didn't do what was expected, I retreated, and it seems to have been the wise choice. We now have a close below 1275 support. We also have oil's price overcoming 3 straight knockdowns from the $143 level to get to $144 today. And tomorrow the news gets piled on. We have an employment report and a decision from the ECB over euro interest rates. With Friday's holiday, we also have a nail-biting 3-day weekend in front of us. I think there is a better-than-even chance that tomorrow will get nasty.


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