With the futures now down across the board – the Russell 2000 put up one hell of a fight (I actually had to rewrite this post as the divergence corrected as I was typing) – it seems like we will sell off coming into Tuesday. Remember the Russell, and the small caps have traditionally led us lower when we do drop. We also have weakness in copper and FCX – both which have been used as tells on economic and market health (FCX is one I picked up from @ChessNWine). Add to this mix the sudden strength in the US dollar and everything seems set for a selloff. This leads me to ask “if everyone is watching and expecting a selloff – what would frustrate the largest amount of market participants?”
Keep in mind that when Egypt imploded – as Libya is currently doing in a much more violent fashion – the market also sold off… for a grand total of 1 day. We also saw weaker futures and a stronger US dollar. However, ask yourselves: For long can the dollar rise in the face of continuous printing and if it is a ‘flight to safety’ (LOL) then why are the Canadian dollar and the Swiss Franc down? Is this violence an excuse for some profit taking or the start of a broader selloff? Time will tell, because I don’t have a clue.
Raise and respect your stops, don’t overreact to the news and protect your neck.
In closing I’d like to share this quote – and remind everyone of Ben Bernanke’s assertion about being able to control inflation – I didn’t write it but have forgotten who did.
When someone is honestly 55% right, that’s very good and there’s no use wrangling. And if someone is 60% right, it’s wonderful, it’s great luck, and let him thank God. But what’s to be said about 75% right? Wise people say this is suspicious. Well, and what about 100% right? Whoever say he’s 100% right is a fanatic, a thug, and the worst kind of rascal.