Global Rip..

As an overnight Global market rip flowed into Europe (most exchanges up 2%),  U.S markets had no choice but to follow.  We were actually quite relieved that 1060 proved to be technically troublesome as this is the top of the ‘range bound/ holding pattern (1038-1060) noted yesterday.  The reason is simple, we don’t want the market to get out of hand before the market has a true read on earnings and cause a sell-off on ‘good earnings news’ down the road.   Either way, up or down we go later,  the strong impetus for the market will be earnings and not Aussie interest hikes, talk of 2nd stimulus talk as was the case today.   The real money is not going to chase the market to new highs on a relief rally,  early afternoon,  we had evidence of this as how easily the market can sell off without conviction buying coming in.  

Most importantly in DJIM land,  this relief rally played out perfectly bouncing 40pts from Friday’s gap support levels to unwind positions and make short lived trades.  After seeing the benign G7 statement this weekend in respect to the USD, we entered the week saying look for a USD weakness trade.  It is incredible to see what has ensued as all focus is on FX with Gold ripping,  Aussie / Canadian dollars at highs etc.  

As far as sec’s, strength was broad based.  Our China’ listed stocks, such as HMIN EJ BIDU  were strong.  One of our few retail stocks, TIF  made a nice run to NCH.

As reports start to trickle out this week, the market will begin to get a read on things and start to get a feel for how to position itself, either for upside or downside.   Every report from PBG today to COST tomorrow morning to AA after hours will be dissected by the real money to begin a feel for what lies ahead.